4.a corporation that pays no dividends means the company does not have a dividen

Question

4.a corporation that pays no dividends means the company does not have a dividend policy A. True B. False
5.in a healthy economy, treasury debt yields (blank) as the maturity increases A.decreases B.decrease then increase C.increase D. Increase then decrease 4.a corporation that pays no dividends means the company does not have a dividend policy A. True B. False
5.in a healthy economy, treasury debt yields (blank) as the maturity increases A.decreases B.decrease then increase C.increase D. Increase then decrease A. True B. False
5.in a healthy economy, treasury debt yields (blank) as the maturity increases A.decreases B.decrease then increase C.increase D. Increase then decrease

Explanation / Answer

Answer 4:

Correct answer is:

B. False

Explanation:

If a company does not pay dividend, it does not mean that does not have a dividend policy. The policy may be that if the company has sufficient investment opportunities to invest and grow then it pays 0% dividend.

As such the statement is False.

Answer 5:

Correct answer is:

C. increase

in a healthy economy, treasury debt yields increase as the maturity increases.

Explanation:

Longer term rates/yields are normally higher than the shorter term rates/yields. Long term involves greater uncertainty and risks. As such treasury debt yields increase as the maturity increases.

Option A, B and D are all incorrect since as maturity period increases rate/ yield increases.

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