Which of the Following Is More True of Cash Dividends

question 129

Multiple Choice

Which of the following is more true of cash dividends than of repurchase offers?

• A)The amount of cash to be returned to shareholders is flexible on a year to year basis.
• B)External funds would be raised before reducing stock repurchase offers but not before cutting cash distributions.
• C)Cash distribution decisions would take priority over investment decisions.
• D)The stock price would be severely penalized if the cash distribution is reduced.