In the Absence of Taxes, Transaction Costs, or Changes in a Firm's

question 49

Multiple Choice

In the absence of taxes, transaction costs, or changes in a firm's operating or investment policies

• A) the greater the payout ratio, the greater the share price of the firm.
• B) the price of a share of stock is not affected by dividend policy.
• C) the firm should retain earnings so stockholders will receive a capital gain.
• D) the firm should pay a dividend only after current equity financing needs have been met.

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Definitions:

Intergenerational Equity

The principle of fairness or justice in relationships between children, youth, adults, and seniors, emphasizing the equitable distribution of resources across generations.

Exponential Growth

A rapid increase in quantity over time, where the rate of growth is proportional to the current size, leading to the doubling of the size in regularly spaced intervals.

Rapidly

Occurring within a very short time frame; happening quickly or in a fast manner.

Non-Metallic

Refers to elements or materials that do not exhibit the characteristics of metals, such as electrical conductivity or luster.