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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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Assume that on September 30, 2017, AirUS, an international airline based in Germany, purchased a Jumbo aircraft at a cost of

kaheart [24]

Answer:

A.7,650,000

B.2,677,500

C.17,000,000

Explanation:

DATA:

purchase cost = 42,500,000

Useful life = 5 years

Estimated useful life in miles = 5,000,000 miles

Salvage value = 4,250,000

Actual useful life in miles = 350,000miles

Solution

A. Depreciation (straight-line)= $\frac{Cost-residualvalue}{Usefullife}$

Depreciation( straight-line)= $\frac{42,500,000-4,250,000}{5}$

Depreciation( straight-line)= 7,650,000

B Depreciation (units of production)= (cost-Salvage value) x $\frac{Actualunits}{Estimatedunits}$

Depreciation (units of production)= (42,500,000-4,250,000)x $\frac{350,000}{5,000,000}$

Depreciation (units of production) = 2,677,500

C. Depreciation (Double declining) = 2 x cost x depreciation rate

Depreciation (Double declining) = 2 x 42,500,000 x 0.2(w)

Depreciation (Double declining) = 17,000,000

Working

Depreciation Rate = 1/Useful

Depeciation Rate = 1/ 05 = 0.2

6 0

4 years ago

A(n) ______ is maintained for each financial statement item, whereas a(n) ______ contains all of the accounts of the company.

Svetllana [295]

Answer:

An account is maintained for each financial statement item, whereas a(n) general ledger contains all of the accounts of the company.

Explanation:

Financial statements refers to a statement that that provides formal records of all financial activities and standing of a company or any entity in a structured and easily understandable manner.

For each item of financial statement, an account is kept with the aim of giving a an accurate record of all business activities that are germane to that specific financial statement item.

The purpose of a general ledger is to show individual transactions and resulting account balance of each account of a company as a single collection.

Therefore, an account is maintained for each financial statement item, whereas a(n) general ledger contains all of the accounts of the company.

4 0

3 years ago

Kirsten is experiencing a great deal of anxiety about her first Algebra II test. "I know that Mr. Dade has a reputation for bein

topjm [15]

Answer:

Stereotype threat

Explanation:

Stereotype refers to preconceived perspective about a particular people or group. Stereotype threat, coined by Claude Steele and Joshua Aronson, refers to a way a person behaves that tend to confirms the negative stereotype about a particular race, gender and others. In Kristen's case the added stress generated by her anxiety about the Algebra II test as a result of the supposedly tough teacher coupled with the preconceived notion that girls are not good in math may lead to her actually failing the test or performing badly. If this feeling were to be removed she may not actually fail or perform poorly in the exam.

6 0

3 years ago

Normally, BC bottling company attaches plastic labels to its bottles. However, a new company is launching a product that require

stellarik [79]

Answer:

Need recognition

Explanation:

Need recognition is the first stage of Business to business (B2b) buying process. The new requirements for labeling created a need. The bottling company now recognizes there is a NEED for the latest fabric labels.

Generally need recognition occurs because of either an internal need or customer need. This however is an example of internal need where the company feels the use of fabric label gives a better representation of their products than using plastic label.

5 0

4 years ago

Read 2 more answers

Nell, single and age 38, had the following income and expense items in Nonbusiness bad debt $ 6,000 Business bad debt 2,000 Nonb

Yuki888 [10]

Answer:

Nell's AGI for 2016 is $48,000

Explanation:

The computation is shown below:

= Salary income + interest income - Business bad debt - net loss

where,

Net loss = - Non business short-term capital loss - Non business bad debt + Non business long-term capital gain

= - $3,000 - $6,000 + $4,000

= - $5,000

But the capital loss would be $3,000

So, the adjusted gross income would be

= $50,000 + $3,000 - $2,000 - $3,000

= $48,000

5 0

4 years ago