Which of the Following Statements Is False

question 56

Multiple Choice

Which of the following statements is false?

• A) While firms do still pay dividends, substantial evidence shows that many firms have recognized their tax disadvantage.
• B) The fact that firms continue to issue dividends despite their tax disadvantage is often referred to as the dividend puzzle.
• C) At the end of the 1990s dividend payments exceeded the value of repurchases for Canadian industrial firms.
• D) While evidence is indicative of the growing importance of share repurchases as a part of firms' payout policies, it also shows that dividends remain a key form of payouts to shareholders.

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Definitions:

Variable Costs

Costs that change in proportion to the level of activity or volume of goods produced in a business.

Unit Contribution Margin

The dollars available from each unit of sales to cover fixed costs and provide operating profits.

Fixed Costs

Expenses that do not change with the level of production or sales over the short term, such as rent and salaries.