A Current Liability Must Be Paid Out of Current Earnings

question 93

True/False

A current liability must be paid out of current earnings.

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Definitions:

Dividend Growth Rate

The annualized percentage rate of growth of a company's dividend payments.

Constant Growth DDM

A valuation model for stocks that assumes dividends grow at a constant rate in perpetuity, used to calculate the present value of future dividend payments.

Intrinsic Value

The true, inherent, or fundamental value of an asset, based on both tangible and intangible factors, as opposed to its market price.

Dividends

Payments made by a corporation to its shareholder members, usually derived from the company's profits.