Which of the Following Statements Is FALSE

question 65

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:

WAIS

Wechsler Adult Intelligence Scale, a standard test used to measure an adult's intellectual and cognitive ability.

Stanford-Binet

An intelligence test designed to measure five factors of cognitive ability: fluid reasoning, knowledge, quantitative reasoning, visual-spatial processing, and working memory.

Intellectual Disability

A condition characterized by significant limitations in both intellectual functioning and in adaptive behavior, which covers many everyday social and practical skills.

Savant Syndrome

A rare condition in which someone with significant mental disabilities demonstrates certain abilities far in excess of average.