Which of the following is a true statement? Select one: A. In the maturity stage, firms...
Which of the following is a true statement?
Select one:
A. In the maturity stage, firms often pay significant cash dividends.
B. In the development stage, firms usually pay little or no cash dividends.
C. When a firm is in its early growth stage, it may pay stock dividends instead of cash dividends.
D. Each of these statements is true.
Homework Answers
Correct answer: D. Each of these statements is true.
Firms in early stage does not make handsome profits to distribute cash dividends thus in this state cash dividend is very rare but it may pay stock dividends.
In developments stage, firm need cash to invest in new projects/opportunities thus usually pay little or no cash dividends.
In maturity stage, firm is stable and already explored mostly opportunities thus often pay significant cash dividends.
Hope it will help, please do comment if you need any further explanation. Your feedback would be highly appreciated.
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