Which one of the following is a drawback of cash dividends?
A) Firms may have to forego positive net present value projects.
B) Stock prices tend to increase as annual dividend amounts increase.
C) Cash dividends support stock prices.
D) Dividends are felt to be directly related to agency costs.
E) Dividend-paying firms tend to attract a wider field of investors than do non-dividend-paying firms.
Correct Answer:
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