Which of the Following Statements Is Correct

question 38

Multiple Choice

Which of the following statements is correct?

• A) The clientele effect can explain why so many firms change their dividend policies so often.
• B) One advantage of adopting the residual dividend policy is that this policy makes it easier for corporations to develop a specific and well-identified dividend clientele.
• C) New-stock dividend reinvestment plans are similar to stock dividends because they both increase the number of shares outstanding but don't change the firm's total amount of book equity.
• D) Investors who receive stock dividends must pay taxes on the value of the new shares in the year the stock dividends are received.
• E) If a firm follows the residual dividend policy, then a sudden increase in the number of profitable projects is likely to reduce the firm's dividend payout.

Understand the concept of cultural lag and its effects on society.

Evaluate the resistance to globalization and its various forms.

Understand the characteristics and implications of postmodernity.

Recognize the role of cultural diffusion and technological advancements in global interactions.

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Definitions:

Physical Count

Physical count involves manually counting all inventory items in a business at a specific time to verify quantities and ensure accuracy in records.

Periodic System

An inventory system where the inventory count is physically updated at specific intervals, and costs of goods sold are calculated at the end of the accounting period.

Moving Average System

A method used in accounting and finance to smooth out data by generating a series of averages of different subsets of the full data set.

Freight-In Costs

Expenses associated with transporting goods from the supplier to the purchaser, typically included in the cost of inventory.