Which of the Following Is NOT a Reason for a Low-Dividend-Payout

question 34

Multiple Choice

Which of the following is NOT a reason for a low-dividend-payout policy?

• A)The avoidance or postponement of taxes on distributions for shareholders
• B)Low-dividend-payout clientele are willing to pay a higher price per share than high-dividend payout clientele
• C)Less need for additional costly outside funding
• D)Higher potential future returns for shareholders

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Definitions:

Internal Failure Cost

Expenses incurred due to defects in products or services before they are delivered to customers, as part of quality control efforts.

Quality Cost Report

A report detailing the costs associated with preventing, detecting, and rectifying product issues to ensure quality.

Eagleson Company

A hypothetical or unspecified business entity used for illustrative purposes.

Prevention Cost

Expenses incurred to prevent defects in products or services before they occur.