The Dividend Market Is in Equilibrium When

question 15

Multiple Choice

The dividend market is in equilibrium when:

• A) all companies adopt a low dividend policy.
• B) half of the companies adopt a low dividend policy and half adopt a high dividend policy.
• C) all clienteles are satisfied.
• D) dividends remain constant and no special dividends are declared.
• E) the total amount of the annual dividends is equal to the net income for the year.

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Definitions:

Actual Fixed Overhead Costs

The real costs incurred for fixed overhead during a specified accounting period.

Budgeted Activity

The planned level of output or activity for a specific period, used for planning and control purposes.

Labor Rate Variance

The difference between the actual hourly wage paid to workers and the expected wage, multiplied by the actual hours worked.

Labor Efficiency Variance

The difference between the actual labor hours taken to produce a good or service and the standard labor hours expected, multiplied by the labor rate.