A Potential Downside to Using Dividends as the Plug Item

question 41

Multiple Choice

A potential downside to using dividends as the plug item is that:

• A) changes in dividends may send shareholders mixed signals.
• B) the plan may suggest negative dividends.
• C) the firm may have to borrow cash to pay dividends.
• D) shareholders may receive an excessive return.

Identify factors that affect the likelihood of making correspondent inferences about others' behaviors.

Explain the role of mind-sets in academic and personal achievement.

Recognize the influence of cultural and gender differences on attributions and mind-sets.

Understand the importance of accurate causal attribution in various social and psychological contexts.

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Definitions:

Amortized Loan

A loan with scheduled periodic payments that cover both interest and principal over a specific time period.

Monthly Mortgage Payment

The amount that is paid each month by a borrower to a lender for a home loan, which often includes principal, interest, taxes, and insurance.

Amortized Loan

A loan with scheduled periodic payments that consist of both principal and interest, typically enabling the loan to be paid off by its maturity date.

Monthly Payments

Regular payments made once per month, often in the context of repaying a loan or paying for services.