You Own Shares in a Start-Up Internet Company

question 77

Multiple Choice

You own shares in a start-up internet company. If the company announces that it will not pay dividends next year as it has in the past, then the price of your shares will ________, holding other factors constant.

• A)increase
• B)decrease
• C)not change
• D)either increase or decrease

---

Definitions:

Credit Sales

Transactions where goods are sold and payment is received at a later date, extending credit to the buyer.

Gain from Sale

The profit realized from the sale of assets or investments when the selling price exceeds the original purchase price.

Operating Income

The profit earned from a firm's core business operations, excluding deductions of interest and taxes.

Operating Revenues

The income earned by a company from its normal business activities.