The Model That States,all Else Equal,dividend-Paying Companies Are Less Risky

question 12

Multiple Choice

The model that states,all else equal,dividend-paying companies are less risky than non-dividend-paying companies is called:

• A) Residual dividend model
• B) Modigliani and Miller dividend irrelevance model
• C) The "bird in the hand" model
• D) The signalling model

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Definitions:

State Unemployment Taxes

Taxes imposed by state governments on employers based on the taxable wages paid to employees, funding unemployment compensation programs.

Contingent Liability

A potential financial obligation that may arise depending on the outcome of a future event.

Likelihood

The probability or chance of an event occurring.

Contingency

An uncertain future event that could affect financial performance or outcomes.