Some of the Cash Flows Shown on a Time Line

question 143

True/False

Some of the cash flows shown on a time line can be in the form of annuity payments while others can be uneven amounts.

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Definitions:

Capital Spending

Expenditures by a company on major physical goods or services that are expected to generate economic benefits in the future.

Residual Dividend Policy

A strategy where a company pays dividends out of the residual or leftover equity only after all project capital needs are met.

Dividend Payout Ratio

Amount of cash paid out to shareholders divided by net income.

Ex-dividend Date

The date on which a stock begins trading without the right to receive the next declared dividend, effectively setting the cut-off for new investors to benefit from the upcoming dividend payment.