____ Decisions Are Decisions as to How Much of Current

question 58

Multiple Choice

____ decisions are decisions as to how much of current earnings to pay out as dividends rather than to retain for reinvestment in the firm.

• A) Capital structure
• B) Capital budgeting
• C) Dividend policy
• D) Investment

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Definitions:

Maintenance Margin

The minimum amount of equity that must be maintained in a margin account to avoid a margin call, expressed as a percentage of the current market value.

Rate of Return

The upward or downward movement in the value of an investment across a chosen timeframe, expressed as a percentage of the investment's initial investment.

Margin

Describes securities purchased with money borrowed from a broker. Current maximum allowed margin on stock purchases is 50%.

Sell the Stock

An action where an investor disposes of their ownership in a corporation through the sale of its shares.