Which of the Following Statements Is Correct

question 37

Multiple Choice

Which of the following statements is correct?

• A)Current Canadian tax law encourages companies to pay dividends rather than retain earnings.
• B)If a company uses the residual dividend model to determine its dividend payments, dividend payouts will tend to increase whenever the company's profitable investment opportunities increase.
• C)The stronger management thinks the clientele effect is, the more likely the firm is to adopt a strict version of the residual dividend model.
• D)Large stock repurchases financed by debt tend to increase earnings per share, but they also increase the firm's financial risk.

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Definitions:

Stressful Social

Situations or environments that induce psychological stress due to social factors such as interpersonal relationships or social settings.

Lobotomy

A surgical procedure that involves cutting or scraping away most of the connections to and from the prefrontal cortex, the anterior part of the frontal lobes of the brain, historically used to treat mental illness.

Psychosurgical Procedure

A medical intervention involving surgery on the brain to treat psychological disorders or severe emotional disturbance.

Uncontrollably Emotional

Experiencing intense feelings that are difficult or impossible to manage or restrain.