Firms Can Pay Out Cash to Their Shareholders in Two

question 34

True/False

Firms can pay out cash to their shareholders in two ways: cash dividends and stock dividends.

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Definitions:

Scenario Analysis

A process of examining and evaluating possible events or scenarios that could affect the outcome of a decision or a projection.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, showing the proportion of fixed to variable costs.

Fixed Costs

Overheads, such as rent, insurance fees, and payroll, that stay the same, independent of the amount of goods produced or sold.