Briefly Explain Why a Distribution Policy May Be Found to Discriminate

question 55

Short Answer

Briefly explain why a distribution policy may be found to discriminate unfairly, what is the nature of the infraction, and what is the consequence of a positive finding of the commission of the offence by the Competition Bureau.

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Definitions:

Intrinsic Value

The perceived or calculated true value of an asset, determined through fundamental analysis without reference to its market price.

ROE

Return On Equity, a profitability ratio that measures the ability of a firm to generate profits from its shareholders' investments in the company.

Required Return

The minimum expected return an investor demands to compensate for the risk of an investment.

Plowback Ratio

The proportion of earnings retained by a company rather than distributed to its shareholders as dividends.