Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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which one is correct please confirm?
QUESTION 29
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The dividend ____ states that investors will tend to be attracted to firms that have dividend policies consistent with the investor's objectives.
a. "informational content"b. passive residual theoryc. "clientele effect"d. signal
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- What is meant by catering theory, and how might it impact a firm’s dividend policy?arrow_forwarddiscuss the critical issues invlove in implementing the dividend growth model approach and the security market line approach in computing the cost of equity of a firmarrow_forwardDoes the successful investment decision increase a company's market value?arrow_forward
- 1. The more optimistic investors are about a company’s future profits, the ________ the ratio of the company’s market value to book value.greaterlowerno effect onarrow_forwardWhat are the advantages and disadvantages of higher dividends to investors?arrow_forward1. Explain the concept of control and its relationship to ownership percentage 2. which criteria do you prefer to use to classify equity investments ( quantitative, qualitative, or a combination of both)? Explain your answer (you may wish to highlight the advantages and disadvantages of each one)arrow_forward
- If the financial markets are competitive and complete, which ones of the following goals of a firm are equivalent? I. Earnings maximization II. Earnings per share maximization III. Share value maximization IV. Maximizing the utility of existing shareholders I and II Il and III II, II and IV IIlI and IVarrow_forwardDo investors generally prefer dividends or share repurchases? Support your answer.arrow_forwardWhat are the real-world factors that would encourage firms to follow a high dividend policy.arrow_forward
- The idea that changes in dividend policy reflects managers' views about the firm's future earnings is known as: a) Modigliani and Miller Theory b) Payoff Theory c) Dividend Signaling Hypothesis d) Pecking Order Hypothesisarrow_forwardThe dividend policy of a company is a key focus for potential investors. This is because dividends are the main contribution to the assumed investment objective. Hence, it is important that management monitor and review the various factors that influence the company's dividend policy. Critically analyse this statement.arrow_forwardThe primary goal of financial management is Select one: a. Increasing the owners wealth b. Reducing risk c. None of these d. Increasing profitarrow_forward
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