Which of the Following Is True of Arguments for Dividend

question 46

Multiple Choice

Which of the following is true of arguments for dividend relevance?

• A) A firm's value is determined solely by the earning power and risk of its assets.
• B) Investors are generally risk averse and attach less risk to current dividends than future dividends or capital gains.
• C) The value of a firm is unaffected as it functions in a perfect market.
• D) A clientele effect exists which causes a firm's shareholders to receive the dividends that they expect.

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