Which of the Following Is NOT a Benefit of Dividend

question 68

Multiple Choice

Which of the following is NOT a benefit of dividend reinvestment plans to firms?

• A) Increased cash flow for reinvestment
• B) No underwriting fees required
• C) Leads to higher earnings per share
• D) All of these options are benefits.

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Definitions:

Discount Rate

The interest rate charged by central banks on loans they give to commercial banks or the rate used to discount future cash flows to their present value.

Present Value

The worth in present terms of a lump sum or cash flows anticipated in the future, using a predetermined rate of return for the calculation.

Per Year

A time frame reference indicating an annual basis.

Savings Account

A savings account in a bank or financial institution that guarantees the safety of the deposited capital while offering a low interest rate.