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QUESTION

Which of the following statement(s) about dividends are FALSE?

Which of the following statement(s) about dividends are FALSE?

-      Dividends are ineffective in mitigating the free-cash-flow problem because paying dividends is not mandatory and hence managers always have the option to stop paying dividends

-      A firm can smooth its dividend payments across periods by adopting a residual dividend policy

-      If a firm adopt a target payout policy, the firm pays the same percentage of net income as dividends across periods. ? 

Question:

-      1 and 2 only

-      1 and 3 only

-      2 and 3 only

-      none of the above

-      all of the above

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