Which of the Following Statements Is FALSE

question 42

Multiple Choice

Which of the following statements is FALSE?

• A)Firms adjust dividends relatively infrequently,and dividends are much less volatile than earnings.This practice of maintaining relatively constant dividends is called dividend signaling.
• B)When a firm increases its dividend,it sends a positive signal to investors that management expects to be able to afford the higher dividend for the foreseeable future.
• C)The average size of the stock price reaction increases with the magnitude of the dividend change,and is larger for dividend cuts.
• D)When managers cut the dividend,it may signal that they have given up hope that earnings will rebound in the near term and need to reduce the dividend to save cash.

Understand the role and limitations of the parol evidence rule in contract disputes.

Recognize the distinctions between agreements that must be in writing and those enforceable through oral agreements or partial writings.

Understand how the courts may interpret contracts that lack clarity or are in dispute.

Learn the limitations on the enforceability of oral contracts related to employment and real estate transactions.

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Definitions:

Classification

The process of organizing things into categories based on shared characteristics.

Consistent Principle

A fundamental concept that remains uniform and unchanged across different situations or applications.

Exhaustive Exclusions

A principle where all possible alternatives or options are considered and then systematically rejected or excluded until a conclusion is reached.

Consistent Principle

A rule or concept that does not contradict itself and is coherent with other principles within the same theoretical framework.