The Dividend Irrelevance Theory States That Although the Reduction or Elimination

question 106

Multiple Choice

The dividend irrelevance theory states that although the reduction or elimination of dividends in the near term will have a negative effect on P₀:

• A) transaction costs will decrease.
• B) the additional earnings retained will help the firm grow faster permitting larger dividends.
• C) dividend theories do not address the long term future.
• D) None of the above

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Definitions:

Intentionality

The quality of being deliberate or purposive in one's actions or thoughts.

Schema

A cognitive framework or concept that helps organize and interpret information based on past experiences.

Sensorimotor Stage

The first of Piaget's stages of cognitive development where infants learn through interacting with the environment using their senses and motor activities.

Internalization of Schemes

The process through which children absorb and integrate external behaviors or cultural practices into their own cognitive frameworks during development.