Which statement is false regarding capital structure under dividend imputation?
A) Misleading results regarding the gain from leverage may appear if a company is not at its optimal dividend policy.
B) Dividend policy decisions are probably more important than capital structure decisions.
C) It is not possible to have a negative gain from leverage.
D) If the dividend payout ratio is 1,a gain from leverage may result,providing that investors with equal marginal tax rates hold equity and debt.
Correct Answer:
Verified
Q19: Which of the following is true of
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A)the ability to make a
Q21: A company's cost of capital is the:
A)amount
Q22: Under the MM 'law of conservation of
Q23: With the introduction of risky debt,MM argues
Q25: A false example of financial distress is:
A)problems
Q26: A limitation of the MM analysis in
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Q28: The 'traditional view' of capital structure argues
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