A Potential Downfall of Using Dividends as the Plug Item

question 89

Multiple Choice

A potential downfall of using dividends as the plug item is that:

• A) it may send shareholders mixed signals.
• B) dividends are constant within a planning horizon.
• C) the firm may have to borrow cash to pay dividends.
• D)shareholders may receive an excessive return.

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Definitions:

Dynamic Process

A system or procedure characterized by constant change, activity, or progress.

Learning 2.0

An approach to education that harnesses web-based technologies and collaborative learning practices, emphasizing learner participation and the sharing of knowledge online.

Trainee-Initiated

Trainee-initiated refers to activities or learning processes that are started and directed by the learners themselves, fostering autonomy and self-directed learning.

Collaborative

Involving two or more parties working together towards a common goal.