Why would a company choose to have a low dividend payout ratio? A.The company has many investment opportunities with high growth potential B.The company has few investment opportunities and they have low growth potential C.The company has very low profits D.The company has very high profits E.The board of directors has decided to do so.

Why would a company choose to have a low dividend payout ratio? A.The company has many investment opportunities with high growth potential B.The company has few investment opportunities and they have low growth potential C.The company has very low profits D.The company has very high profits E.The board of directors has decided to do so.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter8: Fraud, Internal Controls, And Cash

Section: Chapter Questions

Problem 17MC: What would be a reason a company would want to understate income? A. to help nudge its stock price...

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What would be a reason a company would want to overstate income? A. to help nudge its stock price higher B. to lower its tax bill C. to show a decrease in overall profits D. none of the above
What would be a reason a company would want to understate income? A. to help nudge its stock price higher B. to lower its tax bill C. to show an increase in overall profits D. to increase investor confidence
17. Which of the following is not a reason why companies are not always entirely clear on their dividend policy? A. For fear of giving away sensitive information. B . In order to maintain a managerial advantage over shareholders. C. Because they do not know how much is available for dividends. D. Companies have different abilities to communicate
If the stock market is efficient, why do companies manage their earnings? O To avoid violating debt covenants. O To receive bonuses based on reported earnings. O Because companies do not believe the Efficient Market Hypothesis. O All of the above.
M-M theroy with perfect market suggests that divident payment: A.It dependes on the company's capital structure and retained earnings B.Has a positive impact on the value of a firm C.Has a negative impact on the value of a firm D.Has no impact on the value of a firm
4) Why do loss-making companies still pay a dividend?A) The tax benefits exceed the loss incurred in paying the dividend.B) Managers want to signal that the decline in earnings is temporary and that positive earnings are expected in the future.C) Managers realise that reduced dividends will result in lower staff motivation.D) Managers want to signal that the decline in earnings is permanent and shareholders should take their profits.
1.Financial distress is least apt to lead to A. Increase dividends B.financial restructuring C.Liquidation D.Issuing new shares E.Asset restructuring 2.Which following is false regarding with free cash flows? A. If FCFF are positive then FCFE will be positive. B.If FCFF are negative then firms will need to borrow money to reduce net profits to shareholders to maintain investment needs C. If FCFE are positive then FCFF may also be positive D. If FCFE are negative then FCFF maybe positive E. None of the options provided.
For each of the companies described here, would you expect it to have a low, medium, or high dividend-payout ratio? 4. A company with volatile earnings and high business risk? A. Low dividend-payout ratio B. Medium or high dividend-payout ratio.
Explain in full detail why the following statement is false: "Financial managers should not focus on the present stock value of the company. Instead, they should focus on the profitability of the company. Doing so will result in increasing the value of the stock.
Which one of the following statements about dividend policies is FALSE? a. One advantage of dividend reinvestment plans is that they allow shareholders to maintain a position in a company with minimal trading. b. One key disadvantage of a residual dividend policy is that it makes it hard for a company to follow a stable dividend policy. c. The clientele effect suggests that brokerage companies should choose customers whose dividend preferences match those of their client service borkers. d. The "bird-in-the-hand effect" is the argument that investors prefer dividends to capital gains because dividends are more certain than capital gains. e. In today's tax environment, gains through stock repurchases and dividend payments are taxed at the same rate
What is the impact of decrease in assets or increase in liabilities resulting in decreases in equity, other than distributions to equity holders on the profit of the company? a.None of the options b.The profit of the company declines c.The profit of the company remains d.The profit of the company inclines
Accounting Just because the gross profit margin is positive does not mean that a company will be profitable. So what other factors will impact profitability besides a positive gross profit margin? Do you think that when a company has a good gross profit margin that they are guarantee to earn a net income? Explain