A Company Declared and Paid $1 Million in Dividends to Its

question 38

Multiple Choice

A company declared and paid $1 million in dividends to its common stockholders. The effect of this transaction is that the

• A)earnings per share decreased.
• B)earnings per share increased.
• C)current ratio increased.
• D)debt-to-equity ratio increased.

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Definitions:

Workers

Individuals who perform tasks or jobs for pay, ranging from manual labor to professional occupations.

Units

In economics, units refer to the quantifiable measures used to express the quantity of an item, such as pieces, kilograms, liters, etc., used in transactions or production.

Total Cost

The complete cost of production, encompassing both fixed and variable costs, for a good or service.

Average Fixed Cost

The fixed costs of production divided by the quantity of output produced; decreases as production increases.