In the Absence of Taxes, Transaction Costs, or Changes in a Firm's

Multiple Choice

In the absence of taxes, transaction costs, or changes in a firm's operating or investment policies

A) the greater the payout ratio, the greater the share price of the firm.
B) the price of a share of stock is not affected by dividend policy.
C) the firm should retain earnings so stockholders will receive a capital gain.
D) the firm should pay a dividend only after current equity financing needs have been met.