All of the Following Factors Support the Proposition That Dividend

question 30

Multiple Choice

All of the following factors support the proposition that dividend policy matters except:

• A) investors desire to minimize and defer taxes, and capital gains get preferential tax treatment over dividend income.
• B) perfect capital markets.
• C) information asymmetry exists between shareholders and managers.
• D) flotation costs significantly increase the cost of new common stock compared to retained earnings.

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Definitions:

National Character

The perceived unique collective personality, customs, and traits of the citizens of a nation.

Perceptions

Refers to the process of organizing, identifying, and interpreting sensory information to represent and understand the environment.

Stereotype

A fixed, overgeneralized belief about a particular group or class of people.

Extroverted

A personality trait characterized by sociability, talkativeness, assertiveness, and high levels of emotional expressiveness.