Which of the Following Statements About the Residual Dividend Theory

question 116

Multiple Choice

Which of the following statements about the residual dividend theory is FALSE?

• A)The firm will maintain its optimum debt ratio in financing future investments.
• B)Dividend policy by itself has no direct influence on the market price of the firm's common stock.
• C)The firm will issue new common stock to finance investment opportunities in order to ensure that some dividend will be paid.
• D)The firm's investment opportunities,capital structure,and profitability all influence the firm's dividend policy.

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Definitions:

Cognitive Flexibility

the mental ability to switch between thinking about two different concepts or to think about multiple concepts simultaneously.

Thought Disorders

Mental conditions characterized by disorganized thinking, difficulties in coherent communication, and problems with logical reasoning.

Interpersonal Relationships

The connections and interactions between two or more people, which can vary in depth and nature.

Anhedonia

The inability to feel pleasure in normally pleasurable activities, often a symptom of depression or other psychiatric conditions.