Which of the Following Statements Is False

question 22

Multiple Choice

Which of the following statements is false?

• A) Managers are much less committed to dividend payments than to share repurchases.
• B) Share repurchases are a credible signal that the shares are under-priced, because if they are over-priced a share repurchase is costly for current shareholders.
• C) While an increase of a firm's dividend may signal management's optimism regarding its future cash flows, it might also signal a lack of investment opportunities.
• D) Managers will clearly be more likely to repurchase shares if they believe the stock to be under-valued.

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Definitions:

Formal Charges

The assignment of a charge to an atom within a molecule based on the assumption that electrons in chemical bonds are evenly distributed amongst atoms.

Lewis Structure

A diagram showing the bonding between atoms of a molecule and the lone pairs of electrons that may exist in the molecule.

Tert-Butyl Alcohol

An organic compound with the formula (CH3)3COH, used as a solvent and in the preparation of other compounds.

Non-Bonding Lone Pairs

Pairs of valence electrons on an atom that are not involved in chemical bonding but influence the molecule's geometry and physical properties.