Which of the following is the best statement of the conclusion of M & M on the relevance of dividend policy
A.all shareholders are indifferent between receiving dividend income and capital gains
B.increase in retentions results in a higher growth rate
C.discounting the dividends is not a suitable way to value the firms equity
D.the value of the shareholders equity is determine solely by the firms investment selection criteria
Sir correct answer is D but please can you explain ?
Ask the Tutor ACCA FM
MCQ
8y ago#1In a sense all of the statements are factually correct, but the relevance of them all is best stated by D - that the value of equity depends on how the company invests the shareholders money (how it gets distributed as dividend makes no difference).
This topic is locked — no new replies.