Which of the Following Considerations Should NOT Be Related to Management's

question 72

Multiple Choice

Which of the following considerations should NOT be related to management's concerns when setting a dividend or share buy-back policy?

• A) Over the long term, how much does the company's level of earnings exceed its investment requirements? How certain is this level?
• B) Are the shares currently undervalued? Can the management add value to the company by initiating a share buy-back?
• C) Does the company have enough financial reserves to maintain the dividend policy in periods when earnings are down or investment requirements are up?
• D) Can the company quickly raise equity capital if necessary?

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Definitions:

Confounding Factors

Variables that interfere with the clarity of the relationship between the independent and dependent variables in a study.

Confidentiality

The ethical principle or legal right that a physician or other healthcare provider will hold secret all information relating to a patient, unless the patient gives consent permitting disclosure.

Data

Factual information used as a basis for reasoning, discussion, or calculation, often collected through observation or research.

Anonymous

Being unnamed or not identified by name, often used to maintain privacy or confidentiality.