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DiKsa [7]
3 years ago
8

If management wants to maximize its stock price, and if it believes that the dividend irrelevance theory is correct, then it mus

t adhere to the residual dividend policy.
True or False.
Business
1 answer:
kupik [55]3 years ago
7 0

Answer:

The correct answer is False.

Explanation:

This statement is false, since the residual theory of dividends argues that these are irrelevant, that is, that the value of the company is not affected by its dividend policy. The main drivers of this theory are Modigliani and Miller. Both authors affirm that the value of the company is determined solely by the profitability and the degree of risk of its assets (investments), and that the way in which the organization divides its income between dividends and reinvestment does not have a direct effect on its value .

However, some studies show that significant changes in dividends affect the price of shares in the same direction, that is, increases in dividends translate into increases in stock prices, and vice versa. In response, M and M propose that the positive effects of dividend increases be attributed, not to the dividend itself, but to the informational content of dividends with respect to future income. Thus, any increase in dividends would cause investors to raise the price of the shares, while a decrease would cause a corresponding decrease in the price of the shares.

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Which of the below individuals has the best capacity to pay back a loan?
insens350 [35]

Answer:

D. John

Explanation:

John has an annual income of $100,000 which is equivalent to a monthly salary of $ 8,334.00 ($100,000 divide by 12 months)

Applying the 28/36 borrowing rule, Mr. John cannot exceed 36 percent of his monthly income to service debts. It means that John has $ 3000 available every month to service his loans.

John intends to take a loan of $ 10,000. This amount is within his ability to pay. Even if he has other debts, he only needs months to clear the loan plus interest.

If we apply the same rule to Paul, his monthly salary is $2, 084.00. He has $ 750.00 available to pay the loan every month. A loan of $ 50,000 with interest will take about seven years to clear. Considering he may want to take other loans in that period and the value of the car by then, Paul is likely to default.

Eileen will have  $720 available for repayments per month and annually $ 8640.00 to repay $400,000.00; she will need about 47 years. Considering her age, it's not viable.

3 0
3 years ago
The first step to creating a PPC advertising campaign on SEs is to select keywords associated with the campaign. Select one: Tru
Archy [21]

Answer:

False

Explanation:

Given that PPC is an acronym or abbreviation for Pay Per Click, and it is a form of an advertising campaign in which search engines are paid to show or display a link such as a short URL to a firm's website together with either organic search results or in another website.

Hence, the idea that the first step to creating a PPC advertising campaign on SEs is to select keywords associated with the campaign is FALSE

7 0
3 years ago
Bramble Corp., Inc. can produce 100 units of a component part with the following costs: Direct Materials $23000 Direct Labor 350
tia_tia [17]

Answer:

$2,500

Explanation:

Bramble Corp., Inc

Purchase the component part externally $59,000 - $4,000

=$55,000

Direct Materials $23,000

Direct Labor $3,500

Variable Overhead $26,000

Total $52,500

Hence:

$55,000 -$52,500

=$2,500

Therefore the correct make-or-buy decision will be $2,500

7 0
3 years ago
Which of the following statements is true regarding size of teams?A) The most effective teams have twelve to fifteen members.B)
Gwar [14]

Answer:

The correct option is: B) When teams have excess members, cohesiveness declines

Explanation:

A team is defined as the group of individuals that work together to achieve a common desired goal. The members of a team are known as team members.

The composition and size of the team affects the outcome of the team. The optimal size of the team is considered to be between <u>5-12 members</u>.

Also, homogeneity and the number of members in the group determines the cohesiveness of the group.

<u>Therefore, if a group has excess team members, the cohesiveness of the group decreases.</u>

3 0
3 years ago
Human Resource Management (HRM) takes a strategic approach in developing and maintaining a qualified workforce to gain a competi
madreJ [45]

Answer:

The statement is: True.

Explanation:

Human Resources (<em>HR</em>) is the department of an organization in charge of recruiting, selecting, and training employees so they can easily adapt to their work environment. Human Resource Management (<em>HRM</em>) is dedicated to allocating the potential of those employees in a way that they can be more productive to the point of creating a competitive advantage for the firm.

4 0
3 years ago
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