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A Change in Dividend Policy Does Not Affect the Value

Question 49

Multiple Choice

A change in dividend policy does not affect the value of a share of stock as long as:


A) the dividend payout ratio remains constant.
B) all future dividends are changed by the same amount.
C) all the distributable cash flow is paid out.
D) there is an offsetting change in stock repurchases.
E) shareholders are given ample warning.

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