Which of the following best describes a firm's optimal distribution policy?
A) The optimal distribution policy strikes a balance between cash dividends and capital gains that minimizes the firm's stock price risk.
B) The optimal distribution policy strikes a balance between cash dividends and stock dividends that maximizes the firm's stock price.
C) The optimal distribution policy strikes a balance between cash dividends and issuance of new debt that maximizes the firm's stock price.
D) The optimal distribution policy strikes a balance between cash dividends and capital gains that maximizes the firm's stock price.
Correct Answer:
Verified
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