Which of the Following Explanations Is NOT a Possible Benefit

question 23

Multiple Choice

Which of the following explanations is NOT a possible benefit of dividends?

• A) Some investors prefer dividend-paying shares and will be willing to pay a higher price for shares with regular dividends.
• B) Paying out large regular dividends can force management to regularly raise more capital. The extra scrutiny involved in raising capital can increase the incentives of management to run the company efficiently.
• C) Dividends can be used to manage the capital structure of the company.
• D) Paying dividends reduces the probability that the company will enter financial distress.

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Definitions:

Thorough Explanation

An in-depth and detailed clarification of a subject or topic.

Sequential Interview

An interview process where a candidate undergoes multiple rounds of interviews, each with different interviewers.

Shorter

Describing something of less length, duration or extent.

One-on-one Interview

A personal and direct method of communication in which an interviewer meets with a single interviewee to gather information or assess qualifications.