A)

Please refer to the curved line in figure 14.8 and explain the reason for the following: The line initially has an upward slope, but gradually begins to slope downward as you move further out along the horizontal axis.

B)

Please explain the following statement: There are times when a cut in dividends can be a positive signal.

C)

Consider the Dividend Irrelevance Theory and explain the following: Generally speaking, why is there an inverse relationship between dividends and the potential for growth?

D)

Consider the Bird in the Hand Theory and explain the following: Why are dividends less risky than pursuing growth opportunities?