Refer to the Figure Below to Answer the Following Questions

question 28

Multiple Choice

Refer to the figure below to answer the following questions.

Figure 7.2.1
The figure shows the market for shirts in Canada, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt.
-In Figure 7.2.1, international trade ________ total surplus in Canada by ________.

• A)increases; $128 million
• B)decreases; $192 million
• C)increases; $320 million
• D)decreases; $256 million
• E)decreases; $128 million

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Definitions:

Target Capital Structure

The mix of debt, equity, and other securities that a company aims to hold to finance its operations and growth.

Capital Budget

The amount of money allocated for significant long-term investments or projects of a business.

Dividend Payment

A disbursement of a portion of a company's earnings decided by the board of directors to its shareholders.

Residual Dividend Policy

A strategy where dividends are paid to shareholders from the leftover or residual earnings after all operational and expansion costs are covered.