Explain the Importance of Reliability and Validity of Selection Tools

question 60

Essay

Explain the importance of reliability and validity of selection tools used by managers of an organization.

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Definitions:

Stock Dividend

It's a dividend payment made in the form of additional shares rather than a cash payout, representing a reinvestment of company earnings.

Stock Split

An action by a company to divide its existing stock into multiple shares to boost liquidity without changing shareholders' equity.

Retained Earnings

The portion of net income left over for the business after it has paid out dividends to its shareholders.

Permanent Capital

The portion of a company's capital that is not expected to be paid back or withdrawn within a year, including equity and long-term debt.