Which One of the Following Is a Drawback of Cash

question 59

Multiple Choice

Which one of the following is a drawback of cash dividends?

• A)Firms may have to forgo positive net present value projects.
• B)Stock prices tend to increase as annual dividend amounts increase.
• C)Cash dividends support stock prices.
• D)Dividends are felt to be directly related to agency costs.
• E)Dividend-paying firms tend to attract a wider field of investors than do non-dividend-paying firms.

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Definitions:

Resignation

The formal act of giving up or quitting one's office or position, often accompanied by a written notice.

Affirmative Action

Policies or measures that favor groups known to have been discriminated against in the past.

Recruiting

The process of identifying, attracting, interviewing, and hiring employees for a job or role within an organization.

Selection

Selection refers to the process of choosing the most suitable candidates from a pool of applicants for jobs within an organization through various evaluation methods.