With Respect to the Proposition That Dividend Policy Does Not

question 90

Multiple Choice

With respect to the proposition that dividend policy does not matter,in order to raise an additional $5,600 in cash by issuing stock,the stock sold must be worth:

• A) more than $5,600.
• B) $2,800.
• C) $5,600.
• D) less than $5,600.

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Definitions:

SOX

Refers to the Sarbanes-Oxley Act of 2002, a United States federal law that set new or expanded requirements for all U.S. public company boards, management and public accounting firms, aiming to protect investors from fraudulent financial reporting.

Public Accounting Firms

Professional services organizations that provide accounting, audit, tax, and consulting services to businesses and individuals.

Real Risk-free Rate

The rate of return on an investment with no risk of financial loss, adjusted for inflation.

Federal Reserve

The central banking system of the United States, responsible for implementing monetary policy, regulating banks, and ensuring financial stability.