Which of the Following Statements Is True

question 70

Multiple Choice

Which of the following statements is true?

• A) Dividend initiations send a weak signal to the market about management's assessment of the firm's long-run ability to general cash.
• B) Dividend initiations send a strong signal to the market about management's assessment of the firm's long-run ability to general cash.
• C) Dividend cuts rarely impact a firm's stock price.
• D) Dividend increases suggest a temporary increase in a firm's normal level of profitability.
• E) All of the above statements are false.

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Definitions:

SWOT Analysis

A strategic planning tool that identifies Strengths, Weaknesses, Opportunities, and Threats related to business competition or project planning.

Contingency Planning

The process of preparing for unforeseen events or emergencies by developing strategies in advance to handle and mitigate risks.

Market Penetration Strategy

A business approach aimed at increasing market share for an existing product, or promoting a new product, through aggressive marketing and sales tactics.

Question Marks

In a business context, 'question marks' refer to products or business units that have potential for growth but currently do not generate much revenue, often requiring significant investment to improve their market position.