In a Perfect Market,dividend Policy Has No Effect on Shareholders

question 9

Multiple Choice

In a perfect market,dividend policy has no effect on shareholders' wealth because:

• A)transactions are costless.
• B)any cash paid out as dividends must be replaced by issuing additional shares.
• C)directors fix share prices during dividend announcements.
• D)any cash paid out as dividends can be costlessly replaced by issuing new shares.

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Definitions:

Old-fashioned

Describing something or someone as outdated or not in accordance with current trends or standards.

Assimilation

The cognitive process of integrating new ideas, information, or experiences into existing knowledge frameworks.

Old Schema

A cognitive framework or concept that helps organize and interpret information from one's past.

Piaget

Jean Piaget, a Swiss psychologist known for his pioneering work in child development, especially regarding cognitive development stages.