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31) Dividends are said to be sticky. Why is this? (2 pts) a) Because the dollar amount allocated for dividends cannot be changed per SEC
31) Dividends are said to be "sticky". Why is this? (2 pts) a) Because the dollar amount allocated for dividends cannot be changed per SEC regulations b) Because once announced, a company cannot stop dividend payments for at least 1 year c) Because investors expect to get paid at least the same amount every quarter and the stock price suffers if this doesn't happen a) Because once a dividend is announced, the company cannot do a stock repurchase simultaneously 32) In capital structure theory, what is the benefit of issuing debt over issuing equity? (2 pts) a) Debt decreases tax expenses while equity does not b) Debt creates positive NPV projects while equity does not c) Debt decreases volatility of cash flows while equity does not b) Debt increases dividend payouts while equity does not 33) Financial distress occurs when a company is not able to meet its financial obligations, compromising its profitability. All of the following are ways a company can address financial distress, except for (2 pts): a) Cutting investments in order to use that money to pay down debt b) Refinancing debt in order to get more flexible terms c) Issuing equity in order to deleverage the company d) Improving its credit rating in order to have access to more debt
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