Which of the Following Statements Is False

question 80

Multiple Choice

Which of the following statements is false?

• A) In perfect capital markets, holding fixed the investment policy of a firm, the firm's choice of dividend policy is irrelevant and does not affect the initial share price.
• B) In a perfect capital market, when a dividend is paid, the share price drops by the amount of the dividend when the stock begins to trade ex-dividend.
• C) In perfect capital markets, an open market share repurchase has no effect on the stock price, and the stock price is the same as the ex-dividend price if a dividend were paid instead.
• D) In perfect capital markets, investors are indifferent between the firm distributing funds via dividends or share repurchases. By reinvesting dividends or selling shares, they can replicate either payout method on their own.

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Definitions:

UETA Applies

Refers to situations where the Uniform Electronic Transactions Act is relevant, enabling the legal recognition of electronic signatures and records in transactions.

Electronic Means

The use of digital technologies and electronic devices to carry out activities, including communication, transactions, and data storage.

Voluntarily Assented

The act of giving consent or agreement freely and without coercion.

E-contract

A contract that is created, signed, and maintained in electronic form, often over the internet.