If a Company Truly Never Paid a Dividend, There Would

question 3

True/False

If a company truly never paid a dividend, there would be no way for the investing community as a whole to ever get a return on its investment. It would therefore not make sense to invest in the firm's stock.

---

Definitions:

Company Car

A vehicle provided by a company for the business and sometimes personal use of its employees.

Units-of-Activity Method

A depreciation method that calculates an asset's expense based on its usage, activities, or units of production, rather than the passage of time.

Depreciation

The process of allocating the cost of a tangible asset over its useful life, reflecting wear and tear or obsolescence.

Estimated Residual Value

The anticipated value of an asset at the end of its useful life.