Which of the Following Statements Is Correct for a Firm

question 76

Multiple Choice

Which of the following statements is correct for a firm with 100,000 outstanding shares and earnings per share of $6 if retained earnings were just adjusted downward by $50,000?

• A)A $5.50 dividend per share was paid
• B)A $6.50 dividend per share was paid
• C)Net earnings equal $650,000
• D)Total dividends paid equal $50,000 retained earnings = net income less dividends
• ($50,000) = ($6 x 100,000) less dividends
• $450,000 = dividends

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Definitions:

Equity Theory

A concept in social psychology that posits individuals assess their relationships by analyzing the balance between their inputs (such as effort, time, money) and the outcomes (rewards, recognition) they receive, compared to others.

Tragedy of the Commons

Describes a situation where individual users, acting independently according to their own self-interest, deplete or spoil shared resources, leading to long-term consequences for the whole group.

Commons Dilemma

A situation where individual users of a shared resource act independently according to their own self-interest and deplete or spoil the resource through their collective action.

Pro-environment Behavior

Actions taken by an individual or group aimed at protecting or improving the natural environment.