Gamma Ray Corp

question 81

Multiple Choice

Gamma Ray Corp.has annual sales totaling $650,000 and an average gross profit of 20% of cost.What is the dollar amount of the gross profit?

• A)$130,000.
• B)$97,500.
• C)$108,333.
• D)$162,500.

---

Definitions:

Optimal Distribution Policy

The distribution policy that maximizes the value of the firm by choosing the optimal level and form of distributions (dividends and stock repurchases).

Capital Gains

Capital gains are the profits realized from the sale of assets such as stocks, bonds, or real estate, which exceed the purchase price of these assets.

Stock Dividends

The payment of additional shares of a company to its existing shareholders instead of cash.

Stock Splits

A corporate action in which a company divides its existing stock into multiple shares to increase the liquidity of the shares, though the market capitalization remains the same.