Generally,investors Interpret the Announcement of a Decrease in Dividends As

question 59

Multiple Choice

Generally,investors interpret the announcement of a decrease in dividends as:

• A)bad news and the stock price drops.
• B)good news and the stock price increases.
• C)a nonevent and does not affect the stock prices.
• D)very good news and the stock price jumps up.

---

Definitions:

Direct Labor

The wages and salaries paid to employees who are directly involved in the production of goods or the provision of services.

Manufacturing Overhead

Costs in the production process that are not directly tied to a specific product, such as factory utilities or salaries of supervisors.

Product Costs

Expenses directly tied to the production of goods or services, including direct materials, direct labor, and manufacturing overhead.

Absorption Costing

A method of costing that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a unit of product.