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