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3 years ago

Other dividend policy issues

Business

1 answer:

umka2103 [35]3 years ago

4 0

Answer:

Net income increases. - Ability to pay Dividends increases.

Dividends are paid from Retained Earnings which are derived from Net Income. If Net income increases therefore, so does the ability to pay Dividends.

More profitable investment opportunities are available - Decreases Ability to pay Dividends.

If there are more profitable opportunities for investment available, the business will invest in those opportunities. By doing so they will reduce the amount of cash that they have which is cash that could have been paid as dividends.

The firm increases its debt ratio. - Ability to pay Dividends Increase

As a result of the company borrowing more money, there will be more money left to pay out dividends so more dividends will be paid.

2. A. Despite the fact that Dernham Burnham Inc.'s earnings tend to fluctuate from year to year, the company most likely pays a predictable, stable dividend each year.

Companies like Dernham that aim to please investors usually adopt a predictable, stable dividend policy every year so that the investors will have more faith in them and be sure of earnings every year. This will give them a higher rating with the investors.

You might be interested in

What's the difference between a brand-name and a generic product? A. The company that sells the product B. The side effects of t

katen-ka-za [31]

Answer:

Explanation:

The quality should be about the same.

The social responsibility should also be about the same.

There shouldn't be side effects of most products. If you are speaking of medications, there really ought to be the same side effects with the same severity and the same statistical occurrences.

The only difference is the company selling the product.

There have been exceptions to this where different "fillers" were used in the generic brand and the side effects were different and more severe. I've only heard of one case however and I cannot remember what it was. Manufacturers were careful not to let it happen again.

4 0

4 years ago

Changing the prices of products based on the level of demand characteristics of the customer is called ________ pricing.

Airida [17]

Changing the prices of products based on the level of demand characteristics of the customer is called dynamic pricing.

Personalization is the use of customer data to create or modify items to meet individual needs. Customization is the manual modification of an item by a customer to meet their needs and requirements. Content streaming services are perhaps the most famous example of the subscription business model.

Internet technology reduces demand information costs by enabling price transparency (making it easier for consumers to find different prices) and cost transparency (making it easier for consumers to see the true cost of a product). and improve information quality.

Learn more about demand at

brainly.com/question/1222851

#SPJ4

6 0

2 years ago

Polls to answer :

horsena [70]

Age: 15
oldest age: 16
siblings: 1

7 0

3 years ago

Superior Corporation reported taxable income of $1,000,000 in 20X3. Superior paid a dividend of $100,000 to its sole shareholder

Komok [63]

Answer:

$225,000

Explanation:

Federal corporate income tax (21% flat rate)

$1,000,000 x 21% = $210,000

Federal dividend tax (15%).

$100,000 x 15% = $15,000

Dividens are neither expenses nor deductible, so they do not reduce the amount of corporate taxable income. Therefore we must add up the two quantities.

$210,000 + $15,000 = $225,000

7 0

3 years ago

The FOURX Corp. has purchased $50,000 of experimental equipment. The anticipated salvage value is $5500 at the end of its 5-year

Anestetic [448]

Answer:

b. NPW(SL): $33,738; NPW(DDB): $37,068; Recommendation: DDB

Explanation:

The computation is shown below:

As we know that

Present value is

= [Cash Flow ÷ (1 + Rate of Interest)^Year]

where,

Rate of Interest = 10%

Under Straight-line depreciation:

Beginning book value = $50,000

Salvage value = $5,500

So, the depreciationper year is

= [($50,000 - $5,500) ÷ 5]

= $8,900

Year Beginning Depreciation End Present value

book value book value of depreciation

1 $50,000 $8,900 $41,100 $8,090.91

2 $41,100 $8,900 $32,200 $7,355.37

3 $32,200 $8,900 $23,300 $6,686.70

4 $23,300 $8,900 $14,400 $6,078.82

5 $14,400 $8,900 $5,500 $5,526.20

$33,738.00

Under Double declining depreciation:

Depreciation rate per year = (1 ÷ Useful Life) × 100

= 1 ÷ 5 × 100

= 20%

Now for double-declining, the rate is doubled

So,

= 20% × 2

= 40%

Year Beginning Depreciation End Present value

book value book value of depreciation

1 $50,000 $20,000 $30,000 $18,181.82

2 $30,000 $12,000 $18,000 $9,917.36

3 $18,000 $7,200 $10,800 $5,409.47

4 $10,800 $4,320 $6,480 $2,950.62

5 $6,480 $980 $5,500 $608.50

$37,068

5 0

3 years ago