The Net Effects on the Corporation of the Declaration and Payment

question 106

Multiple Choice

The net effects on the corporation of the declaration and payment of a cash dividend are to

• A)decrease liabilities and decrease stockholders' equity.
• B)increase stockholders' equity and decrease liabilities.
• C)decrease assets and decrease stockholders' equity.
• D)increase assets and increase stockholders' equity.

---

Definitions:

Wage Rates

The amount of money paid to an employee by an employer for a unit of time worked or for a certain amount of work completed.

Labor Demand

Denotes the quantity of labor that employers are willing to hire at a given wage rate in a given time period.

Perfectly Elastic

Describes a situation where the quantity demanded or supplied changes by an infinite amount in response to any change in price; most common in theoretical models.

Total Costs

The total amount of expenses a business has for producing goods or services, encompassing both constant and fluctuating costs.