According to the ________ Theory of Payout Policy, Managers Pay

question 34

Multiple Choice

According to the ________ theory of payout policy, managers pay out cash only when pressured to do so by investors.

• A)price pressure
• B)supply
• C)agency
• D)managerial entrenchment

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Definitions:

Indirect Method

A technique used in comprehensive cash flow statements, it adjusts net income for non-cash transactions and changes in working capital to calculate net cash from operating activities.

Cash Flow Statement

A financial report that provides a summary of the cash inflows and outflows for a business over a specific period.

Marketable Securities

Financial instruments and assets that can be easily translated into cash because they have high liquidity and short maturities.

Accounts Receivable

Money owed to a company by its customers for products or services provided on credit.