Which of the following statements is correct?
A. The optimal dividend policy is the one that satisfies management, not shareholders.
B. The use of debt financing has no effect on earnings per share (EPS) or stock price.
C. The riskiness of projected EPS can impact the firm's value.
D. Stock price is dependent on the projected EPS and the use of debt, but not on the timing of the earnings stream.
E. Dividend policy is one aspect of the firm's financial policy that is determined solely by the shareholders.
Answer: C
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