Multiple Choice
As of December 31, 2005, two otherwise identical companies in the same industry, East Company and West Company, have dividend payouts of 20% and 40%, respectively. Looking forward one year, which outcomes are least likely?
I. East Company requires debt financing.
II. West Company increases its dividend payout.
III. West Company's share price is twice that of East Company.
IV. East Company repurchases outstanding shares.
A) I and II
B) II and IV
C) I, II, and III
D) II, III, and IV
Correct Answer:
Verified
Correct Answer:
Verified
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