Which of the Following Would Cause Dividends to Decrease If

question 70

Multiple Choice

Which of the following would cause dividends to decrease if the firm was using the residual dividend model?

• A) The firm has more positive NPV projects.
• B) The firm uses less debt in its capital structure.
• C) Net income decreases.
• D) All of the options would cause dividends to decrease.

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Definitions:

"What-If" Scenarios

"What-If" Scenarios are analytical techniques used to understand the potential outcomes of different actions in decision-making processes.

Economic Order Quantity

A formula used to determine the optimal quantity of inventory to order that minimizes total inventory costs.

Inventory Level

The quantity of goods, materials, or products that are held by a company at a given time, used to meet demand without incurring excess or shortage.

Fixed Quantity Inventory

A replenishment strategy for inventory management where a constant quantity of an item is ordered whenever stock falls to a predetermined level.