The Advantage to Using Lump Sum Increases Is That __________

question 11

Multiple Choice

The advantage to using lump sum increases is that __________.

• A) it doesn't raise the employee's base salary
• B) it does not have to be documented
• C) employees receive a break on taxes
• D) it perpetuates the issue of an employee paid below market

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Definitions:

Preferred Stock

A class of ownership in a corporation with a specified dividend that is paid before any dividends are paid to common stock holders and typically with no voting rights.

Common Stock

Type of security that signifies ownership in a corporation and represents a claim on part of the company's profits and assets.

Dividends

Disbursements issued by a company to its shareholders, representing a share of the company's earnings distributed to its stockholders.

Cash Dividend

A cash dividend refers to the distribution of a portion of a company's profits to its shareholders as cash.