Which of the Following Statements Is FALSE

question 85

Multiple Choice

Which of the following statements is FALSE?

• A)A firm must balance the tax costs of holding cash with the potential benefits of having to raise external funds in the future.
• B)Paying out excess cash through dividends or share repurchases can boost the stock price by reducing managers' ability and temptation to waste resources.
• C)If there is a reasonable likelihood that future earnings will be insufficient to fund future positive-NPV investment opportunities,a firm may start accumulating cash to make up the difference.
• D)According to the managerial entrenchment theory of payout policy,managers pay out cash only when pressured to do so by the firm's investors.

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Definitions:

Questions Correctly

An assessment metric that counts the number of questions a test-taker answers correctly, often used to gauge understanding or proficiency.

Left Handed

Referring to individuals who primarily use their left hand for tasks such as writing and eating; often considered in studies of brain function and development.

Standard Deviation

A scale determining the degree to which data points diverge or are dispersed.

Right-handers

Individuals who naturally prefer to use their right hand for tasks and activities such as writing and eating.