The Manager of XYZ Corp

question 15

Multiple Choice

The manager of XYZ Corp.feels that a dividend increase will increase the stock price because many investors value stock with a dividend-discount model.Why might MM disagree with this assertion?

• A) The increased dividend makes the firm much riskier.
• B) If investment policy is to remain unchanged, the company will need to replace the cash with a stock issue.
• C) Investors prefer capital gains over dividends.
• D) Dividend increases will increase the book value but not the market value of the firm.

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Definitions:

Transportation Revolution

The Transportation Revolution refers to the period of rapid growth in the speed and convenience of transportation in the 19th century, marked by the expansion of railroads, steamships, and the development of new infrastructure.

American Society

The complex social structure of the United States characterized by diverse cultures, traditions, economic practices, and political ideals.

Impact

The effect or influence of one thing on another, often used to describe significant or powerful effects.

Attitudes Towards Progress

Refers to the varied perspectives and opinions individuals or societies hold about the nature and direction of societal, technological, or economic development.