The Factors Involved in Setting a Dividend Policy Include All

question 34

Multiple Choice

The factors involved in setting a dividend policy include all of the following EXCEPT

• A) restrictive covenants in a bond indenture.
• B) growth prospects.
• C) the legal prohibition on paying dividends which exceed current earnings.
• D) capital impairment restrictions.

Know how to prepare and analyze an income statement for manufacturing companies using standard costing.

Learn how to determine the ending balance in various accounts including raw materials, WIP inventory, finished goods, and PP&E net.

Grasp the financial implications of using a standard cost system on inventory valuation.

Comprehend the role of budgeting in setting standard costs.

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Definitions:

Economists

Professionals who study, develop, and apply theories and concepts from economics to analyze how societies utilize scarce resources to produce valuable commodities and distribute them among different people.

Interest Rate

The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the principal amount.

Loan

A sum of money borrowed that is expected to be paid back with interest.

Economic Profit

The financial gain achieved by a firm or individual after deducting both explicit (direct) and implicit (indirect, such as opportunity costs) costs from total revenues.