A Company Is Experiencing Good Profits

question 29

Multiple Choice

A company is experiencing good profits. What two factors might lead directors to avoid large dividend rises?

• A) The risk of having to further increase dividends in future if profits fall
• B) The effect on shareholders of loss of stability and predictability
• C) The risk of having to reduce dividends in future if profits fall
• D) Because it reduces the profitability of future projects

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Definitions:

Polar Grasslands

A cold, treeless region found in the high latitudes, often referred to as tundra, where the subsoil is permanently frozen and vegetation is sparse.

Arctic Tundra

A cold, treeless biome found in the Arctic regions, characterized by permafrost, low temperatures, and minimal vegetation.

Convection

The transfer of heat through a fluid (liquid or gas) caused by molecular motion.

Atmospheric Conditions

The state of the atmosphere at a specific time and place, including factors such as temperature, humidity, and wind velocity.