In the Real World, We Find That Dividends

question 32

Multiple Choice

In the real world, we find that dividends

• A) Usually exhibit greater stability than earnings.
• B) Fluctuate more widely than earnings.
• C) Tend to be a lower percentage of earnings for mature firms.
• D) Are usually changed every year to reflect earnings changes.
• E) Are usually set as a fixed percentage of earnings.

Analyze and compute basic and diluted earnings per share (EPS) including understanding its components.

Understand and calculate dividend yield and price-earnings ratio and their significance to investors.

Identify the reasons for and the accounting treatment of prior period adjustments.

Compute and interpret the book value per share of a company’s common stock.