Williams Plc Is Considering Paying an Ordinary Dividend of £2

question 10

Multiple Choice

Williams plc is considering paying an ordinary dividend of £2 million. At present, the company has £4.4 million in the bank. What effect will the dividend payment have on the following ratios?

• A) The operating profit will decrease and the current ratio will decrease.
• B) The operating profit will decrease and there will be no effect on the current ratio.
• C) There will be no effect on the operating profit and the current ratio will decrease.
• D) There will be no effect on the operating profit and no effect on the current ratio.

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Definitions:

Arithmetic Operations

Basic mathematical computations including addition, subtraction, multiplication, and division.

Categorical

Pertaining to data that can be divided into specific groups or categories that are qualitatively distinct.

Categorical Variables

Variables that represent categories with qualitative characteristics, such as gender, race, or yes/no responses, and do not inherently carry a numerical value.

Information

Data that have been processed, organized, or structured in a way that adds meaning or value, making it useful for decision-making or analysis.