Which of the Following Statements Would Be Consistent with the Dividend

question 44

Multiple Choice

Which of the following statements would be consistent with the dividend irrelevance theory?

• A) There is no relationship between a firm's dividend policy and the value of its common stock.
• B) Perfect capital markets are assumed to exist which allow investors to buy and sell stock without incurring any transaction costs.
• C) Investors are indifferent whether stock returns come from dividend income or capital gains income.
• D) All of the above

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Definitions:

Resistance

The refusal to accept or comply with something; the act of trying to prevent something by action or argument.

Freudenberger

Herbert Freudenberger, a psychologist known for his pioneering work on burnout, a state of physical, emotional, and mental exhaustion caused by long-term involvement in emotionally demanding situations.

Burnout

A state of physical, emotional, and mental exhaustion caused by prolonged stress, often resulting from excessive and sustained work or activity.

Hopelessness

A feeling or state of despair where an individual feels that there are no possibilities for improvement in their situation.