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

1. Contrast traditional economies, command economies, and economies.

Dima020 [189]

Answer:

1. A traditional economy is a system that relies on customs, history, and time-honored beliefs.2 A market economy is a system where the laws of supply and demand direct the production of goods and services. A command economy is where a central government makes all economic decisions.

2. Gross domestic product (GDP) is the monetary value of all finished goods and services made within a country during a specific period. GDP provides an economic snapshot of a country, used to estimate the size of an economy and growth rate. GDP can be calculated in three ways, using expenditures, production, or incomes.

3. Globalization means the speedup of movements and exchanges (of human beings, goods, and services, capital, technologies or cultural practices) all over the planet. One of the effects of globalization is that it promotes and increases interactions between different regions and populations around the globe.

4 0

2 years ago

It is not a consumers responsibility to report fraudental activity

creativ13 [48]

If this is a true/false question, the answer is FALSE.

It is consumers' responsibility to report fraud when it occurs.

4 0

3 years ago

What is your intended major? discuss how your interest in the subject developed and describe any experience you have had in the

Mashutka [201]

This question is mostly based on your personal opinion and experience, so I don't think that I'll be able to help you with this question.

3 0

3 years ago

Item 15 write a function that represents the situation. find the balance a in the account after the given time period t. $2000 d

slega [8]

$fv=pv*(1+r)n^{2}$

pv = previous value =2,000

r =rate= .05/4

n= number of periods = 5*4=20

This is the formula.

4 0

3 years ago

Suppose bundle a contains 5 cds and 5 dvds and bundle b contains 88 cds and 33 dvds. if a consumer is able to rank different com

Fofino [41]

If a consumer was asked to rank different combinations of goods and services terms of how much utility they provide, then a bundle with a total of 112 cds and dvds would rank higher than a bundle with a total of 10 cds and dvds, if based on total of goods only. This does not take into account the contents of the media.

5 0

2 years ago