Tower Pharmacy Pays Out a Fixed Percentage of Its Net

question 110

Multiple Choice

Tower Pharmacy pays out a fixed percentage of its net income to its shareholders in the form of annual dividends.Given this, the percentage shown on a common-size income statement for the dividend account will:

• A)remain constant over time.
• B)be equal to the dividend amount divided by the net income.
• C)vary in direct relation to the net profit percentage.
• D)vary in direct relation to changes in the sales level.
• E)vary but not in direct relation to any other variable.

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Definitions:

Glandular Epithelial Tissue

Specialized epithelial tissue that forms the secreting surface of glands, including both endocrine and exocrine glands.

Nervous Tissue

Type of tissue that is specialized to transmit electrical signals throughout the body, composing the brain, spinal cord, and nerves.

Endocrine Glands

Glands that secrete hormones directly into the bloodstream to regulate various bodily functions.

TSH

Thyroid Stimulating Hormone, a pituitary hormone that regulates the production of hormones by the thyroid gland.