Which of the Following Typically Would NOT Affect the Dividend

question 7

Multiple Choice

Which of the following typically would NOT affect the dividend policy of the firm?

• A) Today's dividend policy is affected by future dividend expectations among investors.
• B) Managers are afraid to decrease their voting control of the company by issuing stock dividends.
• C) The failure of so many high-tech and dot.com companies showed that dividends are important to long-term investors.
• D) The current and future cash flow expectations of the company affect dividend policy.

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Definitions:

Opportunity Cost

The cost of choosing one option over another, representing the value of the foregone alternative.

Marginal Cost

The financial outlay involved in producing an additional unit of a product or service.

Resources

The total means available for economic and political development, such as minerals, labor, and capital.

Pareto Optimal

A situation in economics where resources are allocated in the most efficient manner, making it impossible to reallocate without making at least one individual worse off.