Which of the Following Statements Is Correct

question 30

Multiple Choice

Which of the following statements is correct?

• A)If a firm follows the residual dividend policy, then a sudden increase in the number of profitable projects is likely to reduce the firm's dividend payout.
• B)The clientele effect can explain why so many firms change their dividend policies so often.
• C)One advantage of adopting the residual dividend policy is that this policy makes it easier for corporations to develop a specific and well-identified dividend clientele.
• D)New-stock dividend reinvestment plans are similar to stock dividends because they both increase the number of shares outstanding but don't change the firm's total amount of book equity.

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Definitions:

Bile Acids

Steroid acids found predominantly in the bile of mammals, crucial for the digestion and absorption of fats and fat-soluble vitamins in the small intestine.

Metabolizing

The complex set of life-sustaining chemical transformations within the cells of living organisms, including processes such as digestion, energy production, and detoxification.

Lowest Ph

Describes the most acidic condition in a given set, generally a pH value close to 0, indicating high hydrogen ion concentration.

Pepsin

An enzyme produced in the stomach that initiates protein digestion by breaking down proteins into peptides.