Which One of These Examples Does NOT Meet the Strict

question 61

Multiple Choice

Which one of these examples does NOT meet the strict definition for a dividend?

• A) Steel Gen Company regularly distributes $0.05 to each shareholder for every share they own.
• B) Chalone Vineyards once offered their investors discounts on wine in proportion to the number of shares they owned.
• C) Sippy Downs, Ltd., which operates several horse racing tracks, including the location for the Deagon Derby, distributes two free general admission tickets to every investor who holds more than 100 shares in the company (as of 2013).
• D) Both b and c do not meet the definition for a dividend.

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Definitions:

Fixed Overhead

Expenses that remain constant regardless of how much is produced or sold, including items like lease payments, wages, and insurance premiums.

Direct Labor

The wages or salaries paid to employees who are directly involved in manufacturing a product or providing a service.

Raw Material

Basic materials used in the production process to manufacture finished goods, essential components of production cost.

Cost of Goods Sold

Direct expenditures involved in the manufacture of products a business sells, such as labor and materials.