Equality Refers to Treating Everyone ______ While Equity Refers to Treating

question 5

Multiple Choice

Equality refers to treating everyone ______ while equity refers to treating everyone ______.

• A) the same; differently based on group needs and disadvantages
• B) differently based on group needs and disadvantages; so that they all have the same outcome
• C) so that they all have the same outcome; so that they all have the same opportunities
• D) so that they all have the same outcome; the same

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Definitions:

Prior Earnings

The amount of profit a company made in a preceding period, often used as a benchmark or comparison for current financial performance.

Dividend Irrelevance Theory

The theory that suggests that dividend policy has no effect on either the price of a firm's stock or its cost of capital.

Residual Dividend Policy

A strategy where dividends are paid to shareholders from the residual or leftover equity only after all project capital needs are met.

Loan Indentures

Formal agreements specifying the terms of a bond or loan, including the interest rate, repayment schedule, and other conditions.