Which one of the following refers to the ability of shareholders to undo a firm's dividend policy and create an alternative dividend policy by reinvesting dividends or selling shares of stock?
A)perfect foresight model
B)personalization
C)recapitalization
D)offsetting leverage
E)homemade dividend policy

Question

Quizplus · Accepted Answer

This refers to the concept of using personal investment decisions to create an alternative dividend policy, allowing shareholders to customize their own income stream. This is known as the homemade dividend policy and provides a way for investors to effectively undo a firm's dividend policy by reinvesting dividends or selling shares to create their desired income stream. The other options, such as perfect foresight model, recapitalization, and offsetting leverage, do not relate to the ability of shareholders to create an alternative dividend policy.

Which One of the Following Refers to the Ability of Shareholders