The Effect of ______________ and _______________ on the Value of a Firm's

question 10

Multiple Choice

The effect of ______________ and _______________ on the value of a firm's stock and the wealth of shareholders is zero.

• A)stock dividends, stock splits
• B)cash dividends, stock dividends
• C)cash dividends, stock splits
• D)all of the above
• E)none of the above

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Definitions:

Main-Purpose Rule

A legal principle that if the main purpose of a guarantor to sign a surety agreement is to secure a personal benefit, the agreement does not have to be in writing to be enforceable.

Secondary Obligation

An obligation that arises indirectly or as a result of another primary obligation, often in legal or financial contexts.

Statute of Frauds

A legal concept that requires certain types of contracts to be written and signed to be enforceable.

Statute of Frauds

A legal concept that requires certain types of contracts to be executed in writing and signed by the party against whom enforcement is sought, to be legally enforceable.