The Modigliani-Miller (MM) hypothesis suggests that:a.Dividend policy has no impact on the value of a firmb.High dividend payouts increase the value of a firmc.Low dividend payouts increase the value of a firmd.Dividend policy is determined by market forces

Which one of the following statements is False:Group of answer choicesAn empirical study from Lintner (1956) finds that managers and investors seem more concerned with dividend changes than with dividend levels.In Australia, the majority of companies that distribute dividends do so on a quarterly basis.The Miller and Modigliani (1961) dividend irrelevance proposition assumes no cost of issuing shares.The way a firm chooses between paying dividends and retaining earnings is referred to as its payout policy.

Factors determining dividend policy include:a.Profitability and liquidity of the companyb.Stock price and market conditionsc.Taxation laws and regulatory requirementsd.All of the above

A decrease in a firm’s willingness to pay dividends is likely to result from an increase in its –

Factors affecting Dividend Decision

The bird-in-hand theory of dividend policy suggests that investors prefer:a.Higher dividends today rather than uncertain capital gains in the futureb.Lower dividends today in exchange for potential capital gains in the futurec.Dividends paid in the form of additional shares rather than cashd.Dividends paid irregularly based on company performance