Which of the Following Statements Is False

question 28

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 earning 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:

Gains from Specialization

The increased efficiency and output that result when individuals or entities focus on specific tasks or activities they perform best.

Exchange Rates

The worth of one currency in relation to another, establishing how much of one currency can be exchanged for another.

Exchange Rate

The worth of a particular currency when converted into a different currency.

France

A country located in Western Europe known for its historical and cultural significance, notable landmarks, and as a global center for art, science, and philosophy.