A Cash Payment Made by a Firm to Its Owners

question 84

Multiple Choice

A cash payment made by a firm to its owners when some of the firm's assets are sold off is called a:

• A)liquidating dividend.
• B)regular cash dividend.
• C)special dividend.
• D)extra cash dividend.
• E)share repurchase.

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Definitions:

Mispricing

The occurrence when the market price of an asset does not accurately reflect its intrinsic value, possibly due to information asymmetry, market inefficiency, or other factors.

Extraneous Risk

External risk beyond the control of investors or the company, not directly related to the investment's or company's specific activities.

General Market Exposure

The extent to which an investment or portfolio is subject to fluctuations in the overall market.

Mortgage-Backed Securities

Investment products that are secured by mortgages, which are pooled together by a governmental, quasi-governmental, or private entity.