The Final Distribution of Cash to Shareholders After a Company

question 19

Multiple Choice

The final distribution of cash to shareholders after a company has been sold off or discontinued operations is called a ________ dividend.

• A) complete
• B) liquidating
• C) stock
• D) optimal

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Definitions:

Variable Expenses

Costs that vary in direct proportion to changes in the level of activity or production volume.

Fixed Expenses

Costs that do not change in total over a wide range of activity levels or over a short period, such as rent or salaries.

Net Income

The total earnings of a company, subtracting total expenses from total revenue.

Break-Even Point

The stage where sales numbers or output equalize with total expenditures, creating a situation where there's no financial loss or gain.