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Question
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.
Answer
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Related questions
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A) The net present value.
B) The internal rate of return.
C) The profitability index.
D) The modified internal rate of return.
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The equivalent annual cost method is most appropriate in which of the following situations? In each case, assume that several mutually exclusive options are available.
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The size of capital investments and the difficulty in reversing them once they are made make capital-budgeting decisions very important to the firm.
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Competitive market forces make it imperative for a firm to have a systematic strategy for generating capital-budgeting projects.
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Q:
P/E ratios found in published sources or on the internet are always computed by dividing the next period's expected earnings into the current price of the stock.
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Q:
If the ROE on a new investment is less than the firm's required rate of return:
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B) 14.
C) 2.14.
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The dividend declaration date is the date at which the stock transfer books are to be closed for determining the investor to receive the next dividend payment.
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The ________ designates the date on which the stock transfer books are closed in regard to a dividend payment.
A) declaration date
B) ex-dividend date
C) date of record
D) payment date
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Five years ago, Mr. Martinez purchased 1000 shares of JPM stock at $50 per share. If Mr. Martinez ' tax rate is 25% would he prefer that the company pay a $5.00 per share dividend or offer to repurchase 100 shares at $50 per share?
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D) All of the above
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A) There is not enough information to know.
B) EPS will increase by 10%.
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