Which One of the Following Tends to Be the Primary

question 50

Multiple Choice

Which one of the following tends to be the primary attitude of firms' towards their dividend policy?

• A)Dividends should be increased annually no matter what.
• B)Dividend smoothing is talked about but is not really a factor that affects dividend decisions.
• C)Once a dividend is increased,it should not be decreased.
• D)Dividends should be flexible and adjusted annually in response to changes in the firm's earnings.
• E)The costs associated with cutting dividends are perceived to be less than the costs of obtaining external financing.

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Definitions:

Month-End Adjusting Entry

Journal entries made at the end of the reporting period to update the accounts for accurate financial reporting.

Prepaid Expenses

Expenses paid in advance for goods or services to be received in the future, recognized as assets on the balance sheet until they are expensed.

Management Services

Provided by a specialized team or firm, these services include a wide range of administrative and support functions to improve efficiency and effectiveness within an organization.

Adjusting Entry

An accounting journal entry made at the end of an accounting period to record any unrecognized income or expenses for that period.