QUESTION 10 Following statements are true about Dividends and Dividend Policy, EXCEPT: Dividend Policy concerns both common as well as Preferred Shares of the Firm. Dividends can be declared only by the Board of Directors. Once declared, it cannot be undeclared. . One of Dividend Theory says "Dividend is Irrelevant" meaning Investors' value Dividends and Capltal Gains equally. Optimum Dividend is the one that would maximize the Price Per Share (PPS) of the Firm by having a balance between Dividend and future growth rate. o Dividend policy can affect the Debt/Equity ratio of the Firm and hence the weighted Avg. cost of Capital (WACC). Dividend Policy concerns only common shares of the Firm. Some Investors, who are in the high-Income Bracket, don't like Dividends because they are Taxable. They only like Capital Gains. Some-tevestors, such as Retiroes, like to have Dividends that keep pace with the Rate of inflation to supplement their income