The Total Value of Dividends Paid Out to Shareholders by a Firm

question 19

Multiple Choice

The total value of dividends paid out to shareholders by a firm is equal to

• A)its total after-tax profits
• B)its total after-tax profits minus its retained earnings
• C)its total after-tax profits minus its bond payments
• D)its total after-tax profits plus its retained earnings
• E)the present value of the firm

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Definitions:

Inflationary Gap

The difference between the actual level of output in an economy and the output level needed to achieve full employment without inflation.

Budget Surplus

A situation where income or revenues exceed expenditures over a specified period of time.

Aggregate Demand

Aggregate demand represents the total demand for goods and services within an economy at a given overall price level and time period.

John Maynard Keynes

A British scholar in economics whose contributions had a profound impact on how macroeconomics is understood and applied by governments.