According to the Residual Theory of Dividends, If the Firm's

question 70

Multiple Choice

According to the residual theory of dividends, if the firm's equity need exceeds the amount of retained earnings, the firm would

• A) borrow to pay the cash dividend.
• B) sell additional stock to pay the cash dividend.
• C) pay no cash dividends.
• D) not need to consider its dividend policy.

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Definitions:

Job Order Costing

Job order costing is an accounting method that tracks costs and revenues by specific jobs, allowing for detailed reporting of profitability by individual job.

Controlling Costs

Involves implementing measures and techniques to monitor and reduce business expenses to improve profitability without compromising the quality of goods or services.

Pricing Decisions

Pricing decisions involve determining the price at which a product or service will be offered to the market, taking into account costs, competition, and demand.

Finished Goods Inventory

Completed products that are ready for sale but have not yet been sold.