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.

Understand the characteristics of perfect competition.

Differentiate between short-run and long-run outcomes in perfect competition.

Identify the conditions for profit maximization in perfect competition.

Understand the relationship between price, marginal cost, and average total cost in determining firm efficiency.

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Definitions:

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