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:

Variable Manufacturing Overhead

Overhead expenses in manufacturing that change in proportion to the amount of production activity.

Raw Materials

The basic materials from which products are manufactured or made.

Quantity Variance

The difference between actual quantity of material or labor used in production and the expected quantity, often leading to cost variations.

Direct Labor-Hours

The total hours worked by employees directly involved in the manufacturing process, often used as a basis for allocating labor and overhead costs.