JimGyms Has the Following Quarterly Earnings Projections

question 229

Multiple Choice

JimGyms has the following quarterly earnings projections. The company retains 60% of its earnings and follows a stable dividend policy each year. What is the dividend for the 2nd quarter?

• A) $220,000
• B) $260,000
• C) $300,000
• D) $320,000
• E) $400,000

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Definitions:

Fair Value Option

The Fair Value Option is an accounting option that allows companies to measure selected financial assets and liabilities at fair value, aiming to provide more relevant financial information.

Market Value

The current price at which an asset or service can be bought or sold in the marketplace.

IFRS

International Financial Reporting Standards; a set of accounting standards developed by the International Accounting Standards Board (IASB) that is becoming the global standard for the preparation of public company financial statements.

Equity Method Investments

An accounting technique used to assess the profits earned through an investment in another company, incorporating these profits into the investing company's income statements.