The Use of Stock Dividends by Industries in the Growth

question 14

Multiple Choice

The use of stock dividends by industries in the growth stage is for what purpose?

• A)To dilute the ownership of current holders of equity
• B)To maintain cash to pay off creditors
• C)To signal to investors that the company is profitable
• D)Because cash dividends would signal to investors that the company has reached the crossover point

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Definitions:

Pronation

Turning the palms of the hand downward.

Circumduction

Moving a body part in a circle; for example, tracing a circle with your arm.

Eversion

The movement of turning the sole of the foot outward, away from the midline of the body.