Which of the Following Conclusions About Dividend Policy Is Reasonable

question 16

Multiple Choice

Which of the following conclusions about dividend policy is reasonable?

• A)An inverse relation should exist between the amount of acceptable investments a firm has and the dividends remitted to investors.
• B)Management's actions regarding dividends might carry greater weight than a statement by management that earnings will be increasing.
• C)Management should avoid surprising investors when it comes to the firm's dividend decision.
• D)All of the above are reasonable.

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Definitions:

Externality

An effect of economic behavior that impacts people not directly involved in the transaction, which may be beneficial or harmful.

Socially Optimal Quantity

The socially optimal quantity is the level of production of a good or service that maximizes societal welfare, considering both private and external benefits and costs.

Seller

A seller is an individual or entity that offers goods or services for sale in the market.

Buyer

An individual or entity that acquires goods or services in exchange for money, playing a crucial role in the dynamics of supply and demand in the marketplace.