Which One of the Following Is an Argument in Favor

question 4

Multiple Choice

Which one of the following is an argument in favor of a low dividend policy?

• A)Few,if any,positive net present value projects are available to the firm.
• B)Only the gain on a sale of stock is taxed.
• C)Agency costs
• D)Investor desire for current income
• E)Lack of investor self-control

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Definitions:

Futures Market

A financial exchange where people can trade standardized futures contracts; that is, a contract to buy specific quantities of a commodity or financial instrument at a specified price with delivery set at a specified time in the future.

Stock Index Futures

Futures contracts that obligate the buyer to purchase or the seller to sell a specific stock index at a predetermined future date and price.

Multiplier

A factor that quantifies the impact of a change in one economic variable (like investment or government spending) on the overall economy, especially on national income.

Euros

The official currency of the Eurozone, which is used by 19 of the 27 European Union countries.