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:

Short Run

A period of time during which at least one input, such as plant size, is fixed and cannot be changed.

Unemployment

The condition in which individuals who are capable of working and are seeking work are unable to find employment.

Phillips Curve

An economic theory that suggests an inverse relationship between rates of unemployment and corresponding rates of inflation.

Money Supply

Refers to the total amount of money available in an economy at a specific time, including cash, coins, and balances held in checking and savings accounts.