Which One of the Following Is an Argument in Favor

question 41

Multiple Choice

Which one of the following is an argument in favor of a low dividend policy?

• A)The tax on capital gains is deferred until the gain is realized.
• B)Few,if any,positive net present value projects are available to the firm.
• C)A preponderance of shareholders have minimal taxable income.
• D)A majority of shareholders have other investment opportunities that offer higher rewards with similar risk characteristics.
• E)Corporate tax rates exceed personal tax rates.

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Definitions:

Cost of Goods Sold

The immediate expenses related to the manufacture of products sold by a business, encompassing both materials and workforce.

Perpetual System

An inventory management method that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

FIFO Perpetual

An inventory management system where the first items purchased (First-In) are the first to be sold or used (First-Out), continuously updated.

Cost of Goods Sold

The total cost directly tied to the production of the goods sold by a company, including materials and labor.