-The Cumulative Share of Income Received by the 60 Percent

question 61

Multiple Choice

$\begin{array}{}\hline \text { Percentage of Total Pre-Tax Income Received by Each }\\ \text {Fifth of Households in 1980 and 2010 }\\\begin{array} { |l|c|c| } \hline & 1980 & 2010 \\\hline \text { First 20\% } & 4.5 \% & 4.3 \% \\\hline \text { Second } 20 \% & 10.9 \% & 9.9 \% \\\hline \text { Third } 20 \% & 17.6 \% & 16.0 \% \\\hline \text { Fourth } 20 \% & 25.2 \% & 24.3 \% \\\hline \text { Fifth } 20 \% & 41.8 \% & 45.5 \% \\\hline\end{array}\\\end{array}$
-The cumulative share of income received by the 60 percent of households with the lowest incomes in 2010 was:

• A)14.2 percent
• B)16.0 percent
• C)45.5 percent
• D)54.5 percent
• E)30.2 percent

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Definitions:

Residual Dividend Policy

A strategy where a company pays dividends to shareholders from the residual net income after meeting its capital expenditure requirements.

Net Income

The total profit of a company after all expenses and taxes have been subtracted from revenue.

Outstanding Shares

The total number of shares of a corporation's stock that are currently owned by all its shareholders, including share blocks held by institutional investors and restricted shares.

Stock Repurchase

An action taken by a corporation to repurchase its own shares from the market, thereby decreasing the total number of shares available.