Once Causality Is Established by Assessing the Three Primary Criteria

question 38

Essay

Once causality is established by assessing the three primary criteria for presence of the phenomenon, which two additional criteria help in strengthening the case for causality? Explain the process for applying these two criteria.

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Definitions:

Common Stock

A type of security that signifies ownership in a corporation and represents a claim on part of the corporation's profits or losses.

Dividend Payments

Cash payments made by a company to its shareholders, usually derived from the company's profits.

Financing Activities

Transactions related to raising capital, repaying investors, and restructuring company debt within a business's cash flow statement.

Long-Term Debt

Borrowed money that is due for repayment more than one year into the future.