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Which one of the following statements is correct? A. By smoothing a stream of dividends, the discount rate of a firm can be lower B.
Which one of the following statements is correct?
A. | By smoothing a stream of dividends, the discount rate of a firm can be lower | |
B. | By purchasing a stock immediately before the ex-dividend date and selling it after the ex-dividend date, an investor is able to obtain risk-free gain | |
C. | When a firm unexpectedly cuts its dividend, stock market participants interpret it as a positive signal due to asymmetric information | |
D. | Since dividend policy does not matter, dividends do not provide any meaningful information to stock market participants | |
E. | Stock prices tend to go up on the ex-dividend date |
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