A firm's basic approach to paying dividends can greatly affect which of the following?

Question

Quizplus · Accepted Answer

A firm's approach to paying dividends can have a significant impact on its share prices. For example, if a company has a reputation for consistently paying high dividends, it can attract investors looking for stable income streams, which could increase demand for the company's shares and potentially drive up their price. On the other hand, if a company suddenly cuts or eliminates its dividends, it could negatively impact investor confidence and lead to a drop in share prices. The other options, such as span of financial management, mission statement, and unity of fiscal policy, are not as directly affected by a company's dividend policy.

A Firm's Basic Approach to Paying Dividends Can Greatly Affect