Why May a Large Increase in Earnings Not Translate into a Large

question 5

Multiple Choice

Why may a large increase in earnings not translate into a large increase in dividends?

• A)the earnings will be taxed.
• B)some investors may prefer capital gains.
• C)managers wish to assess the earning's persistence.
• D)the earnings may already be a part of retained earnings.

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Definitions:

Chest Tube

A medical device inserted into the pleural space of the chest to remove air, fluid, or pus.

Drainage Collection Unit

A device or system used in medical settings to collect fluids that drain from a patient's body.

Ambulates

The action of walking or moving from one place to another, often used in medical contexts to assess mobility.

Hemothorax

The accumulation of blood in the pleural cavity, which is the space between the lungs and the chest wall, often resulting from injury or trauma.