The ability of shareholders to undo the dividend policy of the firm and create an alternative dividend payment policy via reinvesting dividends or selling shares of stock is called:

A) Perfect foresight model.
B) M&M Proposition I.
C) Capital structure irrelevancy.
D) Homemade leverage.
E) Homemade dividend policy.

Homemade Dividend Policy

A strategy where investors create their own dividend stream by selling a portion of their portfolio of equities.

Dividend Policy

Refers to the approach or guidelines a company follows in deciding the amount and timing of dividend payments to its shareholders.

Perfect Foresight Model

The perfect foresight model is a theoretical concept in economics where all agents have full and accurate knowledge of all future events, eliminating uncertainty.