The Ability of Shareholders to Undo the Dividend Policy of the Firm

question 14

Multiple Choice

The ability of shareholders to undo the dividend policy of the firm and create an alternative dividend payment policy via reinvesting dividends or selling shares of stock is called a:

• A)perfect foresight model.
• B)homemade dividend policy.
• C)homemade leverage.
• D)capital structure irrelevancy.
• E)MM Proposition I.

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Definitions:

Piaget

A Swiss psychologist renowned for his theories on cognitive development in children, positing stages through which children's thinking evolves from simple to complex structures.

Object Permanence

The understanding that objects continue to exist even when they cannot be observed (seen, heard, touched, smelled, or sensed in any way).

Practice

The repeated exercise or performance of an activity or skill so as to acquire or maintain proficiency in it.

Perseveration

is the repetition of a particular response, such as a word, phrase, or gesture, despite the absence or cessation of a stimulus.