The Dividend Irrelevance Hypothesis Is Based on All of the Following

question 162

Multiple Choice

The dividend irrelevance hypothesis is based on all of the following assumptions except:

• A) investment decisions will not be altered by the amount of dividend payments.
• B) investors do not need cash dividends to supplement their current income.
• C) perfect capital markets.
• D) borrowing decisions will not be altered by the amount of dividend payments.

---

Definitions:

Pearl Harbor

The site of a surprise military attack by the Japanese Navy against the United States naval base at Pearl Harbor, Hawaii, on December 7, 1941, leading to the U.S. entering World War II.

President Roosevelt

A reference either to Franklin D. Roosevelt, the 32nd President of the United States who served during the Great Depression and World War II, or Theodore Roosevelt, the 26th President known for his progressive policies.

United States

A country in North America composed of 50 states, a federal district, five major self-governing territories, and various possessions.

Great Britain

A geographical term that refers to the island located northeast of Ireland and northwest of France, comprising the nations of England, Scotland, and Wales.