One Reason Why Small Business Concerns Have Very Low Dividend

question 81

Multiple Choice

One reason why small business concerns have very low dividend payout ratios is that

• A)the firm usually is low on cash
• B)the firm needs funds for taxes
• C)the firm needs the funds to finance growth
• D)the small firm prefers stock offerings

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Definitions:

Management Team

A group of individuals at the top level of an organization who are responsible for its overall direction and strategy.

Investors

Individuals or institutions that allocate capital with the expectation of receiving financial returns, typically through investments in securities, real estate, or other assets.

Going Public

The process by which a privately held company offers shares to the public in a new stock issuance, making it a publicly traded and owned entity.

Private Placements

A method of raising capital through the sale of securities to a relatively small number of select investors as opposed to a public offering.