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Suppose a company is trying to decide whether to increase or decrease its dividend. Which of the following is (are) correct regarding this decision? Choose
Suppose a company is trying to decide whether to increase or decrease its dividend. Which of the following is (are) correct regarding this decision? Choose the best answer. O A. The company should decrease its dividend if the return on new investments is higher than the cost of capital. OB. All of these answers are correct, at least in most cases. O C. The company should increase its dividend because, according to the dividend-discount model, doing so will always improve the share price. OD. The company should decrease its dividend if doing so will decrease the current stock price. O E. It doesn't matter whether a company increases or decreases its dividend because, according to the dividend-discount model, the benefit from the higher dividend will be offset by a lower future growth rate g, so the stock price will be the same either way. OF. The company should not increase dividends because companies should always reinvest as much as possible. Suppose a company is trying to decide whether to increase or decrease its dividend. Which of the following is (are) correct regarding this decision? Choose the best answer. O A. The company should decrease its dividend if the return on new investments is higher than the cost of capital. OB. All of these answers are correct, at least in most cases. O C. The company should increase its dividend because, according to the dividend-discount model, doing so will always improve the share price. OD. The company should decrease its dividend if doing so will decrease the current stock price. O E. It doesn't matter whether a company increases or decreases its dividend because, according to the dividend-discount model, the benefit from the higher dividend will be offset by a lower future growth rate g, so the stock price will be the same either way. OF. The company should not increase dividends because companies should always reinvest as much as possible
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