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:

Colonial Past

The period in a country's history when it was controlled and exploited by a foreign power, impacting its development, culture, and social structure.

Prosperity

The state of being successful usually by making a lot of money and having a good quality of life.

Global Commodity Chain

The global commodity chain analyzes the worldwide network of production and distribution processes through which a product passes until it reaches the consumer, highlighting the economic and social implications of globalization.

Nike Example

Illustrates a business or marketing strategy, often related to branding, innovation, or globalization, based on the practices and experiences of the Nike corporation.