If Management Wishes to "Capitalize" Part of the Earnings, It

question 88

Multiple Choice

If management wishes to "capitalize" part of the earnings, it may issue a

• A) cash dividend.
• B) stock dividend.
• C) property dividend.
• D) liquidating dividend.

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Definitions:

Debt Financing

The practice of borrowing funds from external sources, typically through loans or bonds, to finance business activities.

Issuing Bonds

The act of a corporation or government borrowing money from investors by selling debt securities, known as bonds, which promise to repay the principal along with interest on specified dates.

Leasing Agreement

A contract where one party agrees to rent property owned by another party for a specified time period in exchange for payment.

Capital Markets

Financial markets in which long-term debt or equity-backed securities are bought and sold, serving as a platform for raising capital.