Palo Alto Enterprises Has $200,000 in Cash

question 87

Multiple Choice

Palo Alto Enterprises has $200,000 in cash.They wish to invest the money in Treasury bills at 5% and use the returns to pay dividends to shareholders after a year.Alternately they can pay a dividend and allow shareholders to make the investment.If corporate tax rates are 30%,which option will shareholders prefer in perfect capital markets?

• A)immediate cash dividend
• B)dividend after one year
• C)prefer half from each source
• D)indifferent between options

Recognize the role of licensing and market restrictions on prices.

Understand the concept of implicit attitudes and their assessment.

Comprehend the causes and effects of cognitive biases and attribution errors.

Identify and differentiate between stereotypes, self-fulfilling prophecies, and out-group homogeneity.

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Definitions:

Total Assets

The sum of all assets owned by an individual or organization, including both current and fixed assets.

Liabilities

Economic obligations of the company, such as money owed to lenders, suppliers, and employees.

Days Sales Outstanding (DSO)

A financial measure that indicates the average number of days it takes a company to collect payment after a sale has been made.

Goodwill

An intangible asset that arises when a business is acquired for more than the fair value of its net identifiable assets, often attributed to brand reputation, customer relationships, and intellectual property.