Which of the Following Statements Is FALSE

question 85

Multiple Choice

Which of the following statements is FALSE?

• A)A firm must balance the tax costs of holding cash with the potential benefits of having to raise external funds in the future.
• B)Paying out excess cash through dividends or share repurchases can boost the stock price by reducing managers' ability and temptation to waste resources.
• C)If there is a reasonable likelihood that future earnings will be insufficient to fund future positive-NPV investment opportunities,a firm may start accumulating cash to make up the difference.
• D)According to the managerial entrenchment theory of payout policy,managers pay out cash only when pressured to do so by the firm's investors.

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Definitions:

Santa Croce

A famous Franciscan church in Florence, Italy, known for its art and as the burial place of several prominent Italian figures, including Michelangelo and Galileo.

Giovanni Bellini

An Italian Renaissance painter known for his pioneering work in developing the Venetian painting style, characterized by rich color and detailed landscapes.

Oil On Wood

A painting technique involving the use of oil paints on a wood panel, popular in European art from the Middle Ages through the Renaissance.

Brunelleschi

Filippo Brunelleschi was an Italian architect and engineer, recognized for his work on the Florence Cathedral's dome, and his role in developing Renaissance architecture.