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:

Workers

Individuals engaged in physical or mental effort aimed at producing goods or providing services in return for wages, salaries, or other forms of compensation.

Type Of Cartel

A formation of producers within the same industry that coordinate to control supply and prices, effectively acting as a monopoly.

Introduction

The initial section or beginning part of a document, speech, book, or any piece of writing that gives an overview and prepares the audience for the information to follow.

Firm

A business organization that sells goods or services in pursuit of profits.