The Theory That Argues That Dividends That the Firm Has

question 14

Multiple Choice

The theory that argues that dividends that the firm has committed to pay are less risky to risk-averse investors than are potential future capital gains is referred to as:

• A) dividend irrelevance theory.
• B) bird-in-the-hand theory.
• C) residual dividend model.
• D) none of the options.

---

Definitions:

Nonhuman Capital

Resources or assets that are not human, such as machinery, buildings, and land, used in the production of goods and services.

Knowledge

information, understanding, or skills obtained through experience or education; the theoretical or practical understanding of a subject.

Skills

The abilities and expertise a person has acquired through experience or education, enabling them to perform specific tasks effectively.

Technological Setbacks

Events or developments that delay or reverse technological progress or innovation.