Which One of the Following Is a Drawback of Cash

question 21

Multiple Choice

Which one of the following is a drawback of cash dividends?

• A)Dividend-paying firms tend to attract a wider field of investors than do non-dividend-paying firms.
• B)Stock prices tend to increase as annual dividend amounts increase.
• C)Firms may have to forgo positive net present value projects.
• D)Dividends are felt to be directly related to agency costs.
• E)Cash dividends support stock prices.

Grasp the role of judicial processes in facilitating ADR.

Distinguish between different roles and qualifications of judges in specialized courts.

Recognize the purpose and process of Early Neutral Evaluation (ENE).

Understand the concept and utility of summary jury trials in dispute resolution.

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Definitions:

Incentives

Incentives are rewards or penalties that motivate individuals or entities to act in a certain way, often used to influence economic behavior and decision-making.

Ability-to-pay Principle

A tax design principle that suggests taxes should be levied according to an individual's or entity's ability to bear them.

Regressive Tax

A tax imposed in such a manner that the tax rate decreases as the amount subject to taxation increases.

Regressive Income Tax

A tax system where the tax rate decreases as the taxable amount increases, placing a higher relative burden on low-income earners.