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Cash Dividends Cause a Decrease in Both Assets and Stockholders

question 27

True/False

Cash dividends cause a decrease in both assets and stockholders' equity of the corporation.


Definitions:

Equity Capital

Equity Capital is the amount of money that is invested in a company by its owners, in exchange for ownership interest in the company.

Rental Cost

The amount of money that must be paid regularly to lease a property or equipment.

Economic Profit

The distinction between aggregate income and comprehensive charges, covering both manifest and inferred expenses.

Opportunity Cost

The value of the best alternative foregone when making a decision.

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