In Which of the Following Situations Is a Reduction in Earnings

question 8

Multiple Choice

In which of the following situations is a reduction in earnings most likely to be followed by a reduction in dividends?

• A) Following a scrip dividend issue in the previous year
• B) When the earnings fall is a result of poor management
• C) When the earnings fall is thought likely to persist for a long time
• D) When the earnings fall is thought likely to be short term

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Definitions:

Cause-and-effect

Cause-and-effect is a relationship where one event (the cause) makes another event happen (the effect), often used to explain why things happen.

Trends

Repeatable patterns taking place over time.

Numeric Data

Information that is represented in numbers, often used for statistical analysis or calculations.

Mean Average

A statistical measure calculated by dividing the sum of values in a data set by the number of values.