A Firm Adheres Strictly to the Residual Dividend Policy, Then

question 34

Multiple Choice

a firm adheres strictly to the residual dividend policy, then if its optimal capital budget requires the use of all earnings for a given year (along with new debt according to the optimal debt/total assets ratio) , then the firm should pay

• A) no dividends to common stockholders.
• B) dividends only out of funds raised by the sale of new common stock.
• C) dividends only out of funds raised by borrowing money (i.e., issue debt).
• D) dividends only out of funds raised by selling off fixed assets.
• E) no dividends except out of past retained earnings.

Differentiate between raw data, information, and the systems used for data processing.

Understand the impact of stock splits and reverse stock splits on shareholder equity and the number of shares outstanding.

Calculate the outcome of stock splits and reverse stock splits.

Interpret the effects of dividend policies and stock repurchase programs on a company's stock price and shareholders.

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Definitions:

Repressed Emotions

Feelings that have been unconsciously pushed down or held back from conscious awareness, often as a defensive mechanism to avoid pain or anxiety.

Significant Figure

A digit in a number that contributes to its precision, indicating the extent of its accuracy.

Unconscious Conflicts

Internal struggles often stemming from repressed thoughts and feelings that lead to psychological tension and symptoms according to psychoanalytic theory.

Hidden Sexual Desires

Unconscious or suppressed sexual feelings that an individual may not be fully aware of or choose not to acknowledge.