The Timing of Dividend Payments Will Not Matter If the Firm's

question 111

True/False

The timing of dividend payments will not matter if the firm's rate of return on equity and the investor's required rate of return are the same.

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Definitions:

Economic Factors

Elements that influence the performance of economies, including inflation rates, interest rates, fiscal policy, and unemployment rates.

Equity Premium Puzzle

The phenomenon that observed historical returns on stocks over government bonds are significantly higher than can be explained by conventional economic theory.

Fama and French

Two renowned economists who developed the three-factor model explaining stock returns on the basis of market risk, size, and value.

Dividend-Discount Model

A method for determining the value of a stock by using predicted dividends and discounting them back to present value.