To Stockholders,the Larger the Net Income,the Greater the Likelihood Of

question 63

Multiple Choice

To stockholders,the larger the net income,the greater the likelihood of:

• A)dividends.
• B)the company will purchase treasury stock.
• C)the stock price decreasing.
• D)all of the above.

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Definitions:

Perpetual Inventory System

An accounting method that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

Exchange Rates

The value of one currency for the purpose of conversion to another, determining how much one currency is worth in terms of the other.

Forward Exchange Contract

An agreement to exchange currencies at a specified rate on a predetermined future date, used to hedge against currency risk.

Net Income

The net income of a company, calculated by deducting all costs and taxes from the overall revenue.