A certain corporation retained almost all of its earnings, only rarely paying a cash dividend. If some of the shareholders objected, the president might make the following true statement(s) in reply:

Multiple Choice

• "Why do you want cash dividends? You would just have to sell some shares when cash is needed."

• None of the other alternatives are correct

• "Why do you want cash dividends? You would just have to go to the trouble of reinvesting them."

• "The share price of your shares is likely to increase since the equity in the firm is larger if dividends are not declared"

• All of the other specific alternatives are correct