Which of the Following Is a Source of External Capital

question 2

Multiple Choice

Which of the following is a source of external capital?

• A) Retained earnings
• B) Inventory
• C) Long-term debt
• D) Operating income (earnings before interest and taxes)

Determine the retention ratio and its significance in dividend policy decisions.

Understand the ex-dividend date and its relevance in the context of stock transactions.

Understand the concept of the price/earnings ratio and its alteration due to corporate actions like dividends and stock repurchases.

Identify the various factors that influence a company’s dividend policy and shareholder satisfaction.

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Definitions:

Cyclic AMP

A secondary messenger important in many biological processes, formed from ATP by the action of adenylyl cyclase.

Second Messenger

A substance (e.g., cyclic AMP or calcium ions) that relays a message from a signaling molecule (the first messenger) bound to a cell-surface receptor; leads to some change in the cell.

Protein Kinase A

An enzyme that transfers phosphate groups from ATP to specific proteins, playing a key role in the regulation of cellular processes.

Tyrosine Kinases

A family of enzymes that catalyze the transfer of a phosphate group from ATP to a tyrosine residue in a protein, playing key roles in signal transduction pathways.