Which of the following statements is correct? One advantage of the residual dividend policy is that...
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Which of the following statements is correct? One advantage of the residual dividend policy is that it leads to a stable dividend payout, which investors like. An increase in the stock price when a company decreases its dividend is consistent with signaling theory as postulated by MM. If the "clientele effect" is correct, then for a company whose carnings fluctuate, a policy of paying a constant percentage of net income will probably maximize the stock price. Stock repurchases make the most sense at times when a company believes its stock is undervalued. Firms with a lot of good investment opportunities and a relatively small amount of cash tend to have above average payout ratios. Which of the following statements is correct? One advantage of the residual dividend policy is that it leads to a stable dividend payout, which investors like. An increase in the stock price when a company decreases its dividend is consistent with signaling theory as postulated by MM. If the "clientele effect" is correct, then for a company whose carnings fluctuate, a policy of paying a constant percentage of net income will probably maximize the stock price. Stock repurchases make the most sense at times when a company believes its stock is undervalued. Firms with a lot of good investment opportunities and a relatively small amount of cash tend to have above average payout ratios.
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Related Book For
Intermediate accounting
ISBN: 978-0077647094
7th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
Posted Date:
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