Light Construction Machinery Company Has an Expected ROE of 11

question 19

Multiple Choice

Light Construction Machinery Company has an expected ROE of 11%.The dividend growth rate will be _______ if the firm follows a policy of paying 25% of earnings in the form of dividends.

• A)3.0%
• B)4.8%
• C)8.25%
• D)9.0% 11% * 0.75 = 8.25%.

Appreciate the considerations involved in cost-plus pricing, including the absorption costing approach and its dependence on forecasted unit sales.

Evaluate the relevance of fixed and variable costs in pricing and special order decisions.

Understand the concept of value-based pricing and its application in establishing selling prices.

Grasp the principles of target costing and its role in setting selling prices.

---

Definitions:

Kneecap

Also known as the patella, it is a small, flat, round bone located in front of the knee joint, protecting it and enhancing the leverage of the thigh muscles.

Metacarpophalangeal (MCP) Joints

The joints in the hand where the bones of the palm (metacarpals) meet the bones of the fingers (phalanges), facilitating movement.

Lower Jawbone

Also known as the mandible, it is the largest bone in the human jaw and supports the lower teeth.

Occipital Bone

A cranial bone located at the back and lower part of the skull, important for head and brain structure and protection.