Which of the Following Statements Regarding Cash Dividends Is True

question 328

Multiple Choice

Which of the following statements regarding cash dividends is true?

• A)Growth and speculative companies typically pay little or no cash dividends.
• B)Cash dividends to common and preferred stockholders are variable amounts.
• C)Cash dividends are guaranteed payments to preferred and common stockholders.
• D)All after-tax earnings of a corporation must be paid out to the common and preferred stockholders.

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Definitions:

Craft Union

Labor union whose members all have a particular skill or occupation.

Bargaining Power

The capacity of one party in a negotiation to influence the terms of an agreement or the balance of power between negotiating parties.

Supply

The total amount of a product or service available for purchase in a market.

Mediation

Conflict resolution procedure in which a mediator hears the views of both sides and facilitates the negotiation process but has no formal authority to dictate a resolution.