Why Do Firms Pay Dividends? It Would Appear That They

question 25

Essay

Why do firms pay dividends? It would appear that they are subject to double taxation,giving more incentive to eliminate them.

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Definitions:

Volume Variance

The difference between the budgeted fixed overhead and the applied fixed overhead, which is usually driven by a difference in actual production volume and the expected production volume.

Materials Price Variance

The variance between the real expense of materials and their anticipated (standard) price.

Raw Material

The basic substances or components that are processed or used in the manufacturing of goods.

Direct Labor-Hours

The cumulative number of labor hours directly engaged in manufacturing goods or services.