Which of the following statements is true?Select one:a.When the companies are facing constraints of earnings and unsuccessful business operation, they may follow irregular dividend policy. b.Stable dividend policy means payment of certain minimum amount of dividend regularlyc.Dividend payable at the usual rate is called as regular dividend policyd.All of these

The dividend policy that pays dividends only when there are excess earnings after meeting all investment needs is known as:a.Stable dividend policyb.Residual dividend policyc.Constant dividend policyd.Irregular dividend policy

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.

Activity 2: Q4) Which of the following statements is FALSE? A Estimating dividends, especially for the distant future, is difficult. B A firm can only pay out its earnings to investors or reinvest their earnings. C Successful young firms often have high initial earnings growth rates. As firms mature, their growth tends to slow down to a constant and stable rate. D According to the constant dividend growth model, the value of the firm depends on the current dividend level, divided by the equity cost of capital plus the growth rate. SUBMIT

2. Which of the following statements is FALSE?Video: 6.B. P5-16 (Payout policy with perfect markets)Group of answer choicesD) In perfect capital markets, investors are indifferent between the firm distributing funds via dividends or share repurchases. By reinvesting dividends or selling shares, they can replicate either payout method on their own.C) In perfect capital markets, an open market share repurchase has no effect on the stock price, and the stock price is the same as the ex-dividend price if a dividend were paid instead.B) In a perfect capital market, when a dividend is paid, the share price drops by the amount of the dividend when the stock begins to trade ex-dividend.A) In perfect capital markets, holding fixed the investment policy of a firm, the firm’s choice of dividend policy is irrelevant and does not affect the initial share price.

Which of the following statements is FALSE?Video: 6.C. P17-25 (Payout policy with taxes)Group of answer choicesA) Unlike with capital structure, taxes are not an important market imperfection that influence a firm's decision to pay dividends or repurchase shares.D) The optimal dividend policy when the dividend tax rate exceeds the capital gains tax rate is to pay no dividends at all.C) When the tax rate on dividends exceeds the tax rate on capital gains, shareholders will pay lower taxes if a firm uses share repurchases for all payouts rather than dividendsB) If dividends are taxed at a higher rate than capital gains, shareholders will prefer share repurchases to dividends.