High Dividends May Be Used as __________ of a Firm's

question 103

Multiple Choice

High dividends may be used as __________ of a firm's __________.

• A) an indicator; high capital gains
• B) an indicator; tax liability
• C) a signal; poor prospects
• D)a signal; good prospects

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Definitions:

Goodwill

An intangible asset representing the value of a company's brand name, reputation, and customer relationships, acquired during a business combination.

Issued Capital

The total value of the shares that have been issued by a company and are held by shareholders, representing the initial capital paid into the business.

Retained Earnings

This is the amount of net income left after a company has paid out dividends to its shareholders, typically reinvested in the business or held as a reserve.

Goodwill

An intangible asset that arises when a company acquires another company for a price higher than the fair market value of its net assets, representing future economic benefits.