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12. Which of the following is INCORRECT regarding stocks? Shareholders have the lowest claim to cash...

12.

Which of the following is INCORRECT regarding stocks?

Shareholders have the lowest claim to cash flows after other stakeholders of the company.

Stocks are generally riskier than bonds.

An already public company issuing more shares to raise capital is referred to as an SEO.

Mature companies with more stable cash flows are more likely to pay dividends.

Average dividend payout ratio of U.S. companies has been increasing over time.
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Answer #1

Option E is correct. because the average payout Ratio of US cos has been decreasing over time.

Reason : - For an economy to grow, the cos need to reinvest the Profits earned by the companies, so that the earnings can be compounded over time. That the reason why US has become the Top economy. If cos payout more dividends, this simply means that the co has no investment opportunities at hand,

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