Which of the following statements about payout policy is FALSE? a. Share repurchases concentrate ownership in the hands of the remaining shareholders, making their shares worth more than they were before the repurchase. b. Firms should generally pay out no more than their free cash flow to equity, unless they are in the process of paying out a large cash balance. c. Dividends typically increase at a slower rate than earnings. d. Firms today return more cash to shareholders through repurchases than through dividends. e. Dividends are lower for firms that have higher growth rates.
Which of the following statements about payout policy is FALSE? a. Share repurchases concentrate ownership in the hands of the remaining shareholders, making their shares worth more than they were before the repurchase. b. Firms should generally pay out no more than their free cash flow to equity, unless they are in the process of paying out a large cash balance. c. Dividends typically increase at a slower rate than earnings. d. Firms today return more cash to shareholders through repurchases than through dividends. e. Dividends are lower for firms that have higher growth rates.
Chapter3: Evaluation Of Financial Performance
Section: Chapter Questions
Problem 12QTD
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Which of the following statements about payout policy is FALSE?
a.
Share repurchases concentrate ownership in the hands of the remaining shareholders, making their shares worth more than they were before the repurchase.
b.
Firms should generally pay out no more than their
c.
Dividends typically increase at a slower rate than earnings.
d.
Firms today return more cash to shareholders through repurchases than through dividends.
e.
Dividends are lower for firms that have higher growth rates.
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