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4 years ago

Other dividend policy issues

Business

1 answer:

umka2103 [35]4 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.

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In Appellia, it takes 10 units of resources to increase its output of sugar from 12 tons to 13 tons, but 11 units of resources t

EleoNora [17]

Answer:

b. diminishing returns to specialization.

Explanation:

Diminishing returns is also called diminishing productivity. It states that as additional unit of input is used in production it will get to a stage where more of input will be required to maintain output levels.

If the same level of input is used it will result in reduction in output over time.

This is exemplified in this secanrio where it takes 10 units of resources to increase its output of sugar from 12 tons to 13 tons, but 11 units of resources to increase output from 13 tons to 14 tons, and 12 units of resources to increase output from 14 tons and 15 tons.

It takes more input to increase output by 1 ton

7 0

3 years ago

Job 593 was recently completed. The following data have been recorded on its job cost sheet:

Diano4ka-milaya [45]

Answer:

a.$6,705

Explanation:

The total cost is the sum of the three cost component, Direct materials, direct labours, and factory overhead.

Direct Labor Cost: 71 hours x $15 per hour = $ 1,065

Manufacturing Overhead: 175 machine hours x $14 per hour = $ 2,450

Direct Materials $ 3,190

Total cost: 1,065 + 2,450 + 3,190 = 6,705

8 0

3 years ago

A person borrows $150 that he must repay in a lump sum no more than 8 years from now. The interest rate is 9.9% annually compo

SashulF [63]

Answer:

a. $181.17

b. $218.82

c. $319.21

Explanation:

If the borrower repays the loan after 2 year

PV = $150

n = 2

r = 9.9%

P/yr = 1

Pmt = $0

FV = ?

Using a financial calculator, FV = $181.1702

The amount that will be due if the borrower repays the loan after 2 year is $181.17.

If the borrower repays the loan after 4 years

PV = $150

n = 4

r = 9.9%

P/yr = 1

Pmt = $0

FV = ?

Using a financial calculator, FV = $218.8175

The amount that will be due if the borrower repays the loan after 2 year is $218.82.

If the borrower repays the loan after 8 years

PV = $150

n = 8

r = 9.9%

P/yr = 1

Pmt = $0

FV = ?

Using a financial calculator, FV = $319.2073

The amount that will be due if the borrower repays the loan after 2 year is $319.21.

4 0

3 years ago

Capital budgeting decisions ______. Multiple select question. involve an immediate cash outlay in order to obtain a future retur

pshichka [43]

Answer:

involve an immediate cash outlay in order to obtain a future return

require a great deal of analysis prior to acceptance

Explanation:

A capital budgeting decision refers to an investment and the financial commitement. If we considered a project so here the business is making the financial commitment and at the same time it invest in the longer period that have an influence on the future projects

So it is an instant cash outflow for gaining a future return and also have a great deal before accepting it

7 0

3 years ago

On december 31, planet company acquired 80% of the voting common stock of star company by issuing 100,000 shares of its own comm

zavuch27 [327]

Answer:

Building with fair value of $150,000

Explanation :

In the consolidation work paper elimination, we eliminate the Equity or Net Identifiable assets that exist in Star Company at the Acquisition Date.

The Building with fair value of $150,000 was the only balance sheet item existing thus this is ultimately the Net Identifiable Assets that would be eliminated.

6 0

3 years ago