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:

Minimum Wage

The lowest legal hourly pay that employers are allowed to pay workers, established to ensure a basic standard of living for employees.

Pay Equity

A principle (or statute) requiring equal pay for work of equal value.

Disabled Workers

Individuals who have a physical or mental impairment that substantially limits one or more major life activities, and are part of the workforce.

Affirmative Action

Programs intended to correct racial, gender, or other imbalances in the workplace.