What Is the Major Argument That Supports the "Bird in the Hand

question 9

Multiple Choice

What is the major argument that supports the "bird in the hand theory"?

• A)There is no difference between dividend yields and capital gains.
• B)The risk profile of the firm depends on the risk of its cash flows, not its dividends.
• C)Present value of growth opportunities are more volatile, hence increase the risk of the firm.
• D)Dividend payments signal the good standing of the firm.

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Definitions:

Voltage Divider

A circuit that generally is constructed by connecting resistors in series to produce desired voltage drops across the resistors.

Voltages

The electrical potential difference between two points in a circuit, measured in volts (V), driving current flow through the circuit.

Total Resistance

The overall resistance in an electrical circuit, calculated differently for series and parallel circuits.

Applied Voltage

Applied voltage refers to the electrical potential difference intentionally established across a component or circuit for operation.