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taurus [48]
3 years ago
13

Which of the following statements is true? Increasing dividends will always increase the stock price. Increasing dividends will

always decrease the stock price, because the firm is depleting internal funding resources. Increasing dividends may not always increase the stock price, because less earnings may be invested back into the firm and that impedes growth.
Business
2 answers:
tiny-mole [99]3 years ago
5 0

Answer:

Increasing dividends may not always increase the stock price, because less earnings may be invested back into the firm and that impedes growth.

Explanation:

if increasing dividends results in the company not having enough funds for reinvestment, then value of the company may go down, since value of a stock is the present value of all expected cash-flows from holding the stock. But, if the company is paying dividend from free cash flows, then the payment of the dividend will not negatively affect the value of the stock.

In summary, paying a dividend will not always increase the stock price, and will not always decrease the stock price.

zysi [14]3 years ago
5 0

Answer:

The correct answer is letter "C": Increasing dividends may not always increase the stock price, because less earnings may be invested back into the firm and that impedes growth.

Explanation:

Dividends are one of the main determinants of corporate interest, according to the Dividend Discount Model (<em>DDM</em>). The other determinant is the risk of cash flows from the product, which is expressed in the rate of return expected. Because of the need for reinvestment, most fast-growing companies do not pay dividends. It is only from free cash flow that dividends should be paid, otherwise, if taken the payment from the earnings, investments in the company will be less.

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3 years ago
When the demand curve shifts to the left and all else is held constant, the equilibrium price ________ and the equilibrium quant
rewona [7]

When the demand curve shifts to the left and all else is held constant, the equilibrium price <u>falls</u> and the equilibrium quantity <u>falls</u>.

<h3>The types of chart.</h3>

In Economics, there are two main types of chart that can be used to illustrate the relationship between the total quantity of goods or services that are demanded by consumers and the total quantity of goods or services that were supplied by a manufacturer (producer) at a particular price and these include the following:

  • Supply schedule
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<h3>What is an equilibrium?</h3>

An equilibrium can be defined as the point on a supply and demand chart where the demand curve and the supply curve intersect.

In conclusion, the equilibrium price and the equilibrium quantity would <u>fall</u> when the demand curve shifts to the left and all else is held constant.

Read more on equilibrium here: brainly.com/question/2000166

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6 0
2 years ago
How Is productivity determined?
saul85 [17]

Answer:

a. by measuring The relationship to inputs and outputs

Explanation:

Productivity shows the efficiency of generating output using the available inputs. It is measured by dividing the output of a company or a production line by the inputs used. Therefore, productivity shows the relationship between inputs and outputs.

Productivity can also be measured by labor output. In this case, the output is divided by the number of labor hours used.

7 0
3 years ago
Which of the following measures the percentage change in earnings before interest and tax(or operating cash flow) associated wit
Anton [14]

Answer:

1. Measure of the percentage change in earnings before interest and tax or operating cash flow:

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Explanation:

Company B's degree of operating leverage is the financial measure that shows the degree of change of the operating income of the company in relation to a change in her sales revenue.  With this measure, investors and analysts of Company B are able to evaluate how sales impacts the company's operating income.  There are many ways to measure a company's degree of operating leverage.  One of the methods subtracts the variable costs of sales and divides that number by sales minus variable costs and fixed costs.

Company A's P/E ratio or price/earnings ratio is the measure of the relationship between the current market price and its earnings per share.  It is used to evaluate the value of the company's stock.  It points out whether the company's stock is undervalued, overvalued, or correctly valued.

4 0
3 years ago
Tim and Mike work for a broker who tells them to call their clients and inform them whenever their investments gain or lose 3% o
natulia [17]
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4 0
3 years ago
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