The Fact That Flotation Costs Can Be Significant Is Justification

question 41

Multiple Choice

The fact that flotation costs can be significant is justification for:

• A) a firm to issue larger dividends than its closest competitors.
• B) a firm to maintain a constant dividend policy even if it frequently has to issue new shares of stock to do so.
• C) maintaining a constant dividend policy even when profits decline significantly.
• D) maintaining a high dividend policy.
• E) maintaining a low dividend policy and rarely issuing extra dividends.

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