It has been argued that investors prefer high-payout companies because dividends are more certain (less risky) than the capital gains that are supposed to come from retained earnings. However, Miller and Modigliani say that this argument is incorrect, and they call it the "bird-in-the-hand fallacy." MM base their argument on the belief that most dividends are reinvested in stocks, hence are exposed to the same risks as reinvested earnings.

Answer the following statement true (T) or false (F)


True

Business

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______ is the briefest of all emotions.

A. Fear B. Surprise C. Anger D. Happiness

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Companies that use brand ambassadors are most likely involved in ________ marketing

A) ambush B) spam C) buzz D) viral E) database

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Which force for change is defined as encouraging employees to come up with new ideas and new ways of doing things?

a. Organizational restructuring b. Management changes c. Customers changing preferences d. Intrapreneurship

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If the price of Iguana Handbags Inc. stock is $43, its required return is 20%, and the last dividend was $3, what is its dividend growth rate? (Round to the nearest tenth.)

A) 12.2% B) 13.0% C) 11.7% D) 10.0% E) 17.4%

Business