Why May a Large Increase in Earnings Not Translate into a Large

question 8

Multiple Choice

Why may a large increase in earnings not translate into a large increase in dividends?

• A) The earnings will be taxed.
• B) Some investors may prefer capital gains.
• C) Managers wish to assess the earning's persistence.
• D) The earnings may already be a part of retained earnings.

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Definitions:

Participative Decision-Making

A decision-making process in which all members of a group contribute to and influence the outcome of a decision.

Coercion

Involves compelling an individual to act in a certain way by using force or threats.

Resistance To Change

Refers to opposition or pushback by individuals or groups within an organization when they perceive that a change is threatening their norms, beliefs, procedures, or interests.

Organizational Development

An area of study and application focused on enhancing people's understanding and capability in achieving better organizational change and performance outcomes.