Dividend Payments Are a Type of Financing Activity Because the Company

question 107

True/False

Dividend payments are a type of financing activity because the company is paying stockholders for the use of their money.

---

Definitions:

Profitability

Profitability measures a company's ability to generate earnings as compared to its expenses and other costs incurred during a specific period.

Return on Common Shareholders' Equity Ratio

A measure of profitability that calculates how much profit a company generates with the money shareholders have invested, focusing on common shareholders.

Marketability

The ease with which a product can be sold or a security can be bought or sold in the market without affecting its price.

Profitability

An indicator of how profitable a company is relative to its total assets, demonstrating the efficiency with which a company can generate profit from its operations.