Which of the Following Statements Is FALSE

question 76

Multiple Choice

Which of the following statements is FALSE?

• A)Managers are much less committed to dividend payments than to share repurchases.
• B)Share repurchases are a credible signal that the shares are underpriced,because if they are over-priced a share repurchase is costly for current shareholders.
• C)While an increase of a firm's dividend may signal management's optimism regarding its future cash flows,it might also signal a lack of investment opportunities.
• D)Managers will clearly be more likely to repurchase shares if they believe the stock to be under-valued.

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Definitions:

Long-Run Equilibrium

A state in a market where all factors of production are fully utilized, leading to a situation where supply equals demand, with no external pressures to change.

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, representing true profitability.

Increase Production

The process of raising the output or quantity of goods and services produced by a firm or country.

Nonrefundable Ticket

A ticket purchase that cannot be returned for a refund, often cheaper than refundable options and common in air travel.