Which of the Following Would Be Most Likely to Lead

question 5

Multiple Choice

Which of the following would be most likely to lead to a decrease in a firm's dividend payout ratio?

• A) Its earnings become more stable.
• B) Its access to the capital markets increases.
• C) Its R&D efforts pay off, and it now has more high-return investment opportunities.
• D) Its accounts receivable decrease due to a change in its credit policy.

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Definitions:

LLC

Abbreviation for Limited Liability Company, a business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation.

Transferable Interest

The portion of a member's ownership in a limited liability company (LLC) that can be transferred or sold to other parties, typically including the right to receive financial distributions.

Default

Failure to fulfill a legal obligation, especially failure to pay a debt on time.

Profit Share

This refers to a portion of a company's profits allocated to its employees, shareholders, or partners as a form of incentive or bonus.