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:

Tenders

Formal offers to carry out work, supply goods, or buy land, goods, or services at a specified price.

Security Interest

A legal claim or lien on collateral, which gives the holder the right to seize property if the debtor fails to meet the obligations of a loan or agreement.

Line of Credit

An arrangement between a financial institution and a client that establishes a maximum loan balance that the borrower can access.

Inventory

The total amount of goods and materials held by a business for the purpose of sale or production.