What Is the Most Likely Prediction After a Firm Reduces

question 100

Multiple Choice

What is the most likely prediction after a firm reduces its regular dividend payment?

• A) Earnings are expected to decline.
• B) Investment is expected to increase.
• C) Retained earnings are expected to decrease.
• D) Share price is expected to increase.

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Definitions:

Financial Condition

An assessment of an entity's ability to meet its financial commitments, based on its assets, liabilities, and equity positions at a given time.

Corporation

A legal entity that is separate and distinct from its owners, which can own assets, incur liabilities, and be sued or sue.

Advantages

Advantages are benefits or favorable factors that contribute to the success and competitiveness of a business or strategy.

Disadvantages

The negative or less favorable aspects of a situation, decision, or item.