Which of the Following Statements Is False

question 49

Multiple Choice

Which of the following statements is false?

• A) A common approximation is to assume that in the long run, dividends will grow at a constant rate.
• B) The dividend each year is the firm's earnings per share (EPS) multiplied by its dividend payout rate.
• C) There is a tremendous amount of uncertainty associated with any forecast of a firm's future dividends.
• D) During periods of high growth, it is not unusual for firms to pay out 100% of their earnings to shareholders in the form of dividends.

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Definitions:

Operating Activities

Transactions and events that affect the net income of a business, reflected in its cash flow from operations and including everyday functions like selling products and paying wages.

Comparative Balance Sheet

A financial statement that presents a company's financial position at two or more points in time, allowing for comparison.

Net Cash

The amount of cash available after accounting for all cash receipts and payments.

Cash Dividend

A sum of money given by a company to its shareholders, typically from the company's profits.