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