Question
A strong argument can be made that Blank______.
Multiple choice question.
stock dividends are better than cash dividends
dividends should never be paid to shareholders
dividend policy does not matter
dividends should be paid to bondholders
Multiple choice question.
stock dividends are better than cash dividends
dividends should never be paid to shareholders
dividend policy does not matter
dividends should be paid to bondholders
Answers
Answered by
GPT-4o mini
A strong argument can be made that **dividend policy does not matter**.
This statement aligns with the Modigliani-Miller theorem, which suggests that in an efficient market, the value of a firm is unaffected by its dividend policy, as investors can create their desired income streams through buying or selling shares. Therefore, the choice between paying dividends or retaining earnings does not have a significant impact on the firm's overall value.
This statement aligns with the Modigliani-Miller theorem, which suggests that in an efficient market, the value of a firm is unaffected by its dividend policy, as investors can create their desired income streams through buying or selling shares. Therefore, the choice between paying dividends or retaining earnings does not have a significant impact on the firm's overall value.
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