Given Constant Earnings Per Share, an Increase in Dividends Will

question 193

Multiple Choice

Given constant earnings per share, an increase in dividends will generally:

• A) Increase the dividend yield as well as the capital gains yield.
• B) Decrease the growth rate of the corporation and increase the current yield.
• C) Increase the dividend yield and decrease the current yield.
• D) Have no effect on either the capital gains yield or the total return.
• E) Have no effect on either the total return or the current yield.

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Definitions:

Operating Revenue

Income generated from a company's core business activities, excluding income from investments or secondary sources.

Tax Rate

The percentage at which an individual or corporation is taxed, which can vary depending on income level, type of business, or legal jurisdiction.

Tax Effect

The impact of tax laws on the financial performance of a business, influencing its net income and cash flow.

Depreciation Schedule

A table that outlines the annual depreciation expenses for an asset over its useful life.