Multiple Choice
Stock dividends
A) decrease stock prices because no cash goes to shareholders but companies pay transactions costs.
B) may increase stock prices if the dividend is used to maintain on optimal trading range for the common stock.
C) may increase stock prices if investors perceive the dividend as containing favorable information about the firm's future prospects.
D) Both B and C are true.
Correct Answer:
Verified
Correct Answer:
Verified
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