Assume That Company a Is Doing Quite Well and Has

question 188

Multiple Choice

Assume that Company A is doing quite well and has healthy cash flows from operating activities. Its board of directors has decided to NOT pay any dividends to its shareholders for the foreseeable future. This is most likely because

• A) the company wishes to reinvest its cash for future growth opportunities.
• B) it would increase the company's debt to equity ratio.
• C) it would reduce retained earnings.
• D) because it would cause a mass selloff of the company's shares.

---

Definitions:

Planning

The process of making strategic decisions and setting goals and objectives to achieve desired outcomes in the future.

Profit Division

The method by which revenue after costs is distributed among various stakeholders or divisions within an organization.

Production Processes

The sequence of operations or steps involved in manufacturing a product or delivering a service, from raw material to final product.

Production Rate

The speed at which products are manufactured or produced within a given time frame.