RAJ Industries Earned an Income of $4,000,000 and Distributed $850,000

question 3

Multiple Choice

RAJ Industries earned an income of $4,000,000 and distributed $850,000 as dividends. A year later, earnings had risen by 5% and RAJ distributed earnings of $700,000. What may investors have concluded about RAJ?

• A) RAJ is retaining earnings to improve share prices.
• B) RAJ is paying a dividend in order to improve share prices.
• C) RAJ is indicating an expectation of significant future earnings growth.
• D) RAJ is going to retire debt and and replace it by issuing preferred shares.
• E) RAJ is signalling a concern that their Brazilian facilities would be taken over and nationalized.

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