Future Investment Plans Are Important Determinants of Payout Policy Because

question 62

Multiple Choice

Future investment plans are important determinants of payout policy because of:

• A)signalling to investors.
• B)costs of raising new capital.
• C)stock price depreciation.
• D)debt holder restrictions.
• E)their effect on cash retention.

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Definitions:

Self-handicapping

A cognitive strategy where individuals create obstacles or excuses for themselves to avoid blame in case of failure but can take credit in case of success.

Self-enhancement

The desire to maintain, increase, or portray one's self in a positive light to others and oneself.

Defensive Strategy

Tactics used by individuals or groups to protect themselves from perceived threats, criticism, or harmful situations.

Compensation

Payment or reward given for service, effort, or loss.