1. Dr. Sharon Garrison explains that the term 'dividend' usually refers to a cash .......... of earnings; if it comes from other sources, it is called 'liquidating dividend'.

2. The dividend may be a signal to the public of the management's anticipations for future policy of the firm and

3. Companies that have a .......... history of stable dividend payouts would be negatively affected by lowering or omitting dividend distributions.

4. According to the .......... of the no-dividend policy, a company's alternatives to paying out excess cash as dividends are the following: undertaking more projects, repurchasing the company's own shares, acquiring profitable assets, and reinvesting in financial assets.

5. Once the company decides on whether to pay dividends, they may establish a(n) .......... permanent dividend policy, which may in turn impact on investors and perceptions of the company in the financial markets.

6. Dividends are payments made to stockholders from a firm's earnings, whether those earnings were .......... in the current period or in previous periods.

7. Dividends may affect capital .......... because financing with earnings is cheaper than issuing new common equity.

8. The Dividend Irrelevance Theory purports that a firm's dividend policy has no effect on either its worth or its cost of capital: investors .......... dividends and capital gains equally.

9. The hypothesis for dividend policy irrelevance is based on the assumptions of 1) perfect capital markets; 2) .......... behavior on the part of participants in the market; 3) certainty about the investment policy of the firm; and 4) managers that act as perfect agents.

10. For dividend policy to .......... one or more of these assumptions cannot hold.