Which of the Following Typically Would NOT Affect the Dividend

question 7

Multiple Choice

Which of the following typically would NOT affect the dividend policy of the firm?

• A) Today's dividend policy is affected by future dividend expectations among investors.
• B) Managers are afraid to decrease their voting control of the company by issuing stock dividends.
• C) The failure of so many high-tech and dot.com companies showed that dividends are important to long-term investors.
• D) The current and future cash flow expectations of the company affect dividend policy.

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Definitions:

Diathermy

A type of heat therapy in which a machine produces high-frequency electromagnetic waves that achieve deep heat penetration in muscle tissue.

Rent Expense

The cost incurred by a business for the use of a property, facility, equipment, or other asset under a lease agreement, charged as an expense.

Prepaid Rent Expense

An expense account that records payments for rent made in advance of the rental period.

Adjusting Entry

At the end of an accounting timeframe, records are made to attribute income and spending to the specific period in which they were incurred.