Which of the Following Is Not True Regarding Firms Use

question 151

Multiple Choice

Which of the following is not true regarding firms use of net assets (assets minus liabilities) ?

• A)Firms may choose to use the net assets generated by earnings to repurchase common shares.
• B)Firms may choose to use the net assets generated by earnings to repurchase common shares which result in cash outflows for a firm, similar to paying a cash dividend.
• C)In the case of share repurchases, only those shareholders that choose to sell their shares to the firm receive cash.
• D)Some firms pay periodic dividends to the common shareholders out of net assets.
• E)Firms typically retain some or all of the net assets generated by earnings, causing net assets to decrease, along with retained earnings, which is the component of shareholders' equity showing the cause of that decrease in net assets.

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Definitions:

Parallel Distributed Processing

A computational approach in cognitive science, suggesting that information processing occurs through networks of interconnected nodes, simulating neural networks.

Processing Units

Components within a computer or digital system responsible for executing instructions and processing data.

Serial Processing

The act of processing data elements one after the other, sequentially.

Executive Processes

Cognitive functions that involve planning, decision-making, problem-solving, and controlling attention and behavior.