Modigliani and Miller, Recognizing That Dividends Do Somehow Affect Stock

question 86

Multiple Choice

Modigliani and Miller, recognizing that dividends do somehow affect stock prices, suggest that positive effects of dividend increases are attributable

• A) directly to the dividend policy.
• B) directly to the optimal capital structure.
• C) not to the informational content but to the consistency in the payment of dividends.
• D) not to the dividend itself but to the informational content of the dividends with respect to future earnings.

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Definitions:

Time Out

A disciplinary technique used to remove a child from an environment where inappropriate behavior has occurred, to encourage self-soothing and reflection.

Systematic Desensitization

is a behavioral therapy technique used to reduce anxiety through gradual exposure to the feared object or situation coupled with relaxation exercises.

Progressive Relaxation

A technique involving the tensing and relaxing of muscle groups in sequence to achieve physical and mental relaxation.

Feared Object

An object or situation that elicits a strong fearful or phobic reaction from an individual.