Skylona Inc

question 61

Multiple Choice

Skylona Inc.'s rate of return on equity is 12%.It can either pay a dividend of $5.00 today or reinvest the money and pay a dividend of $5.60 at the end of the year.From a shareholder's point of view, the value of the dividend paid now is [blank] and the value of the dividend paid a year from now is [blank].

• A)$5.00; $4.46
• B)$5.00; $5.00
• C)$4.46; $5.00
• D)$5.60; $5.00

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Definitions:

Advantages and Disadvantages

The beneficial and unfavorable aspects or outcomes of a decision, action, or situation.

Wage-Rate Compression

A situation where differences in wages among employees narrow, often leading to less distinction in pay between higher and lower-level jobs.

Compensation Difference

The variation in pay and benefits among employees, which can be due to factors like experience, education, job function, or performance.

Job Evaluation Systems

Formal processes and criteria used by organizations to determine the relative value and complexity of jobs within the organization to establish fair compensation.