Multiple Choice
Which statement is false regarding capital structure under dividend imputation?
A) Misleading results regarding the gain from leverage may appear if a company is not at its optimal dividend policy.
B) Dividend policy decisions are probably more important than capital structure decisions.
C) It is not possible to have a negative gain from leverage.
D) If the dividend payout ratio is 1,a gain from leverage may result,providing that investors with equal marginal tax rates hold equity and debt.
Correct Answer:
Verified
Correct Answer:
Verified
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