Which of the Following Statements Is False

question 66

Multiple Choice

Which of the following statements is false?

• A) The total payout model allows us to ignore the firm's choice between dividends and share repurchases.
• B) By repurchasing shares, the firm increases its share count, which decreases its earnings and dividends on a per-share basis.
• C) The total payout model discounts the total payouts that the firm makes to shareholders, which is the total amount spent on both dividends and share repurchases.
• D) In the dividend discount model we implicitly assume that any cash paid out to the shareholders takes the form of a dividend.

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Definitions:

Wage Rate

Wage rate refers to the standardized amount of compensation paid to employees for their labor, either per hour, day, or piece.

Standard Wage Rate

A predetermined rate of pay for a particular job or task, often used in budgeting and cost control to standardize labor costs.

Direct Labor

Direct labor refers to the work done by employees that is directly involved in the production of goods or the provision of services.

Variance

A measure of the dispersion or spread of a set of data points around their mean value.