Empirical evidence about the behaviour of financial managers suggests that that firms ________ repurchase activity and also ________ dividend payments.
A)do not smooth, do not smooth
B)do not smooth, smooth
C)smooth, do not smooth
D)smooth, smooth

Question

Quizplus · Accepted Answer

Empirical evidence suggests that firms do not smooth repurchase activity, as it is often used flexibly based on market conditions and excess cash. However, firms tend to smooth dividend payments to maintain a stable and predictable dividend policy for investors.

Empirical Evidence About the Behaviour of Financial Managers Suggests That