The Empirical Evidence on the Relationship Between the Expected Return

question 1

Multiple Choice

The empirical evidence on the relationship between the expected return on stocks and their dividend yields show:

• A) conclusive evidence that dividends should be set as low as possible.
• B) conclusive evidence that dividends should be set as high as possible.
• C) conclusive evidence that dividends don't matter.
• D) inconclusive evidence; some show evidence that high dividend payouts are best, others show the opposite.
• E) inconclusive evidence, although all studies show that high dividend payouts are best.

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