Which of the Following Is Correct for a Firm with $400,000

question 20

Multiple Choice

Which of the following is correct for a firm with $400,000 in net earnings, 20,000 shares, and a 30% payout ratio?

• A)retained earnings will increase by $120,000
• B)each share will receive a $1.20 dividend
• C)$120,000 will be spent on new investment
• D)the dividend per share will equal $6.00

---

Definitions:

Legal Information

Facts, data, and materials related to the law and its practices, intended to inform individuals about legal rights, duties, and procedures.

Business Decision

The process of making choices that affect an organization's operations, potentially influencing its success or failure.

Contingency Fee Arrangement

A payment agreement where a lawyer only gets paid if the case is won, taking a fixed percentage of the recovered amount.

Legal Research

The process of identifying and retrieving information necessary to support legal decision-making, including analysis of statutes, case law, and legal precedents.