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Anna35 [415]
3 years ago
10

According to the residual theory of​ dividends, if a​ firm's equity need exceeds the amount of retained​ earnings, the firm woul

d​ ________. A. borrow to pay the cash dividend B. sell additional stock to pay the cash dividend C. pay less dividends D. pay no cash dividends
Business
1 answer:
Radda [10]3 years ago
4 0

Answer:

Option D Pay no cash dividends

Explanation:

The residual theory of dividends (as its name suggests) says that the dividend must be paid out of the amount that the firm doesn't desire to retain because it can finance its investments from the retained earnings. So if the investment funding requires excessive of its retained earnings then it will not pay dividends. So in the given scenario, the need of finance for the firm is more than the fund that the company has retained.

So according to residual theory of dividends, the company must not issue cash dividends because it already requires funds.

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Economic efficiency is
Marina CMI [18]

Answer:

The correct answer is option A.

Explanation:

A market outcome will be considered economically efficient if the marginal benefit earned from the last unit is equal to the marginal cost incurred in the production of the last unit while the economic surplus or the sum of consumer surplus and producer surplus is at maximum.

If the marginal cost and benefit are not equal then the outcome is said to inefficient. It means that either the resources are not being allocated efficiently or the production is not efficient.

6 0
3 years ago
Watts Corporation made a very large arithmetical error in the preparation of its year-end financial statements by improper place
daser333 [38]

Answer:

a prior period adjustment

Explanation:

A prior period adjustment -

It is the correction of the accounting error which took place in the past and was written in the prior year of financial statement , net of the income taxes , is known as a prior period adjustment .

It is the method to fix the previous problem of past during the reporting .

hence , the correct term fro the given statement is a prior period adjustment .

5 0
3 years ago
What are three items that the national government provide
ioda
1. Government
2. Military
3. Protection

Hope this helps. 
6 0
3 years ago
Larry is declared mentally incompetent. Beth, Larry’s friend, insists that Larry transfer her considerable assets to Beth "for s
DaniilM [7]

Answer:

Donative intent.

Explanation:

Donative intent refers to the conscious desire to make a gift. This is different from giving something for nothing by mistake or under pressure.

3 0
3 years ago
JKL has 3 million shares of common stock outstanding and 80,000 bonds outstanding. The bonds pay semi-annual coupons at an annua
mylen [45]

Answer:

54.48%

Explanation:

The computation of the weight of equity is given below;

But before that we need to do the following calculations

Total Equity

= 3 million shares × $30

= $90 million

The Value of Debt,

Total Debt = 80,000 (1,000)(0.94)

= $75.2 million

Now the weight of equity is

= $90 million ÷ ($90 million + $75.2 million)

= 54.48%

8 0
3 years ago
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