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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Definitions:

Value System

A coherent set of values adopted and/or evolved by a person, organization, or society as a guideline in making decisions.

Culture Wars

Conflicts between groups with differing beliefs, values, and practices, typically relating to morality, religion, and societal norms.

Core Values

Fundamental beliefs or guiding principles that dictate behavior and action, helping an individual or organization determine what is right from wrong.

Social Commentators

Individuals who offer insight, opinions or commentary on social trends, behaviors, and events.