Which of the Following Statements Is FALSE

question 14

Multiple Choice

Which of the following statements is FALSE?

• A)While firms do still pay dividends,substantial evidence shows that many firms have recognized their tax disadvantage.
• B)The fact that firms continue to issue dividends despite their tax disadvantage is often referred to as the dividend puzzle.
• C)At the end of the 1990s,dividend payments exceeded the value of repurchases for U.S.industrial firms.
• D)While evidence is indicative of the growing importance of share repurchases as a part of firms' payout policies,it also shows that dividends remain a key form of payouts to shareholders.

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Definitions:

Supply Function

A relation that shows the quantities of a good that producers are willing to sell at different prices, holding other factors constant.

Production Function

An economic model that describes the relationship between the inputs used in production and the resulting output.

Factor 1

Represents the primary variable or input used in the production of goods or services, typically labor or capital.

Long-Run Cost Function

A representation of how the total production cost of a firm changes with output in the long run, when all inputs can be varied.