Which of the Following Statements Is FALSE

question 66

Multiple Choice

Which of the following statements is FALSE?

• A)From an accounting perspective,dividends generally reduce the firm's current (or accumulated)retained earnings.
• B)The way a firm chooses between paying dividends and retaining earnings is referred to as its payout policy.
• C)Most companies that pay dividends pay them semiannually.
• D)Occasionally,a firm may pay a one-time,special dividend that is usually much larger than a regular dividend.

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Definitions:

Par Value

A nominal value assigned to a security or company stock, serving as the minimum price at which the security can initially be sold.

Coupon Payment

Dollar amount of interest paid to each bondholder on the interest payment dates.

Maturity

The date on which the principal amount of a financial instrument, such as a bond or loan, is due to be paid in full.

Current Price

Current Price is the present market price at which an asset or a service can be bought or sold.