Asked by
Tyree Wright
on Nov 07, 2024
Verified
Which of the following is NOT accurate regarding corporate dividends?
A) Once declared, a dividend becomes a liability of the firm.
B) The value of a firm's stock is ultimately determined by its dividend policy.
C) The existence of an information content effect tends to make it difficult to determine the effects of dividend policy.
D) In the absence of a more favourable tax rate on cash dividends, investors will prefer stocks with relatively low dividend payout rates.
E) Dividend stability is usually viewed as a desirable objective.
Corporate Dividends
Funds disbursed by a corporation to its shareholders, typically as a distribution from profits.
Information Content Effect
The phenomenon where stock prices adjust in response to new information being released, reflecting its value or implications.
Dividend Policy
A company's strategy or guidelines dictated to decide how much it will pay out to shareholders in dividends.
- Discern and clarify the pivotal factors impacting the choices related to dividend distribution policies in corporations.
Verified Answer
CE
Learning Objectives
- Discern and clarify the pivotal factors impacting the choices related to dividend distribution policies in corporations.