Which of the Following Statements Is CORRECT

question 42

Multiple Choice

Which of the following statements is CORRECT?

• A)One advantage of dividend reinvestment plans is that they enable investors to avoid paying taxes on the dividends they receive.
• B)If a company has an established clientele of investors who prefer a high dividend payout, and if management wants to keep stockholders happy, it should not follow the strict residual dividend policy.
• C)If a firm follows a strict residual dividend policy, then, holding all else constant, its dividend payout ratio will tend to rise whenever the firm's investment opportunities improve.
• D)If Congress eliminates taxes on capital gains but leaves the personal tax rate on dividends unchanged, this would motivate companies to increase their dividend payout ratios.
• E)Despite its drawbacks, following the residual dividend policy will tend to stabilize actual cash dividends, and this will make it easier for firms to attract a clientele that prefers high dividends, such as retirees.

Recognize the role of management by exception in focusing managerial attention on significant variances.

Understand the distinctions between standard, actual, and budgeted costs.

Acknowledge the responsibility of various departments in affecting cost variances.

Comprehend different types of variances, including cost, sales, and volume variances.

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Definitions:

Ostracism

The social or professional exclusion of an individual by their peers or organization, often resulting in negative psychological and emotional consequences.

Sarcasm

The use of irony to mock or convey contempt, often characterized by saying the opposite of what is meant to highlight the absurdity of a situation.

Referent Power

A form of interpersonal power that derives from being admired and respected, leading others to identify with the person having power.

Position

An assigned role or location within an organizational structure or context.