Variables X and Y Are Independent of Each Other

question 114

Multiple Choice

Variables X and Y are independent of each other.If we plot X on the horizontal axis and Y on the vertical axis,the line that connects combinations of X and Y in a two-variable diagram is

• A)parallel to the horizontal axis.
• B)downward-sloping (left to right).
• C)parallel to the vertical axis.
• D)upward-sloping (left to right).
• E)a or c

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Definitions:

Residual Dividend Policy

A policy wherein dividends are based on the earnings left over after all operating expenses and expansion projects are funded.

Target Capital Structure

The optimal mix of debt, equity, and other securities that a firm aims to hold, which minimizes its cost of capital and maximizes its stock price.

Capital Budget

Planning for the acquisition and use of long-term assets to achieve a company’s strategic goals.

Payout Ratio

A financial metric indicating the percentage of a company's earnings paid out as dividends to shareholders, typically expressed as a percentage of net income.