A Study of Companies' Regular Dividends and Earnings from 1946-1964

question 18

Multiple Choice

A study of companies' regular dividends and earnings from 1946-1964 indicates that companies

• A) tended to decrease dividends if earnings rise and fall over two years.
• B) had no relationship between dividends and earnings.
• C) were more likely to increase dividends when earnings rise than to decrease dividends when earnings fall.
• D) had earnings and dividend declines for the majority of years.

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Definitions:

Contractual Relationship

A legally binding connection between two or more parties defined by a mutual agreement and enforceable by law.

Verbally

involves the use of spoken words to convey information, instructions, or ideas.

Implied

Suggested or understood without being directly expressed or explicitly stated.

Unlimited Liability

The legal obligation of business owners to bear any and all debts of the business with their personal assets.