For a Firm to Develop a Sensible, Useful Dividend Policy

question 4

Multiple Choice

For a firm to develop a sensible, useful dividend policy, the three things that should be considered are:

• A) dividends should not be paid if positive NPV projects are available, stock should always be issued to pay dividends, repurchases with surplus cash should be considered if positive NPV projects exist.
• B) dividends should not be paid if positive NPV projects are available, stock should always not be issued to pay dividends, repurchases with surplus cash should be considered if no positive NPV projects exist.
• C) dividends should be paid if positive NPV projects are available, stock should always be issued to pay dividends, repurchases with surplus cash should be considered if positive NPV projects exist.
• D) dividends should be paid if positive NPV projects are available, stock should always not be issued to pay dividends, repurchases with surplus cash should be considered if no positive NPV projects exist.
• E) dividends should not be paid if positive NPV projects are available, stock should always not be issued to pay dividends, repurchases with surplus cash should be considered if positive NPV projects exist.

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Definitions:

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Foucault refers to Michel Foucault, a French philosopher and social theorist known for his influential ideas on power, knowledge, and the relationship between society and individuals.

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A devastating Category 5 hurricane that struck the Gulf Coast of the United States in August 2005, causing widespread destruction and significant loss of life.

African-American

An ethnic group in the United States with ancestral roots in Africa, primarily those whose ancestors were forcibly brought to America through the transatlantic slave trade.