Cash Dividends Send Which Two of the Following Signals to the Market

question 12

Multiple Choice

Cash dividends send which two of the following signals to the market? I. agency costs will be lowered since less cash will be held by the firm
II) the firm is planning on downsizing
III) the firm is currently, and expects to continue to be, profitable
IV) the firm will no longer conduct stock repurchases

• A) I and II only
• B) II and III only
• C) III and IV only
• D) II and IV only
• E) I and III only

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Definitions:

Original Jurisdiction

The authority of a court to hear a case when it is first brought to court.

United States Supreme Court

The highest federal court in the United States, which has ultimate appellate jurisdiction over all federal and state court cases that involve a point of U.S. law.

Deposition

An oral question-and-answer session conducted under oath during which an attorney questions parties or witnesses from the opposition in a lawsuit.

Interrogatories

Written questions to be answered in writing under oath by the opposite party in a lawsuit.