In Establishing a Dividend Policy, a Firm Should Retain Funds

question 9

True/False

In establishing a dividend policy, a firm should retain funds for investment in projects yielding higher returns than the owners could obtain from external investments of equal risk.

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Definitions:

Equilibrium

A situation in a market where demand equals supply, and there is no tendency for the quantities supplied and demanded to change.

Market

The institution through which buyers and sellers interact and engage in exchange.

S And D

Stands for Supply and Demand, which are the forces that determine the price of goods and services in a marketplace.

CD-Rom Drives

Hardware devices used for reading data stored on CD-ROMs, typically used for distributing software and storing media in the past.