Why May a Large Increase in Earnings Not Translate into a Large

question 5

Multiple Choice

Why may a large increase in earnings not translate into a large increase in dividends?

• A)the earnings will be taxed.
• B)some investors may prefer capital gains.
• C)managers wish to assess the earning's persistence.
• D)the earnings may already be a part of retained earnings.

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Definitions:

Pituitary Gland

A small endocrine gland located at the base of the brain that produces and regulates a variety of crucial hormones, influencing growth, metabolism, and reproductive functions.

Adrenal Gland

An endocrine gland located above the kidneys that produces various hormones, including adrenaline and cortisol, which are involved in stress responses.

Gonads

Organs that produce gametes; in males, they are the testes, and in females, the ovaries.

Broca's Area

An area located within the dominant hemisphere's frontal lobe that is associated with the generation of speech.