Answer:
1.
<u>Net income increases</u><em>. - </em>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.
<u>More profitable investment opportunities are available</u> - 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.
<u>The firm increases its debt ratio</u>. - 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.
Answer: buying stakes.
Explanation: a tame answer
Answer:
Problem 3: Let x = price of bag of pretzels Let y = price of box of granola bars
We have Lesley's purchase: 4x+2y=13.50
And Landon's: 1x+5y=17.55
We can use the elimination method. Let's negate Landon's purchase by multiplying by -1. -1x-5y=-17.55
We add this four times to Lesley's purchase to eliminate the x variable.
2y-20y=13.50-70.2
-18y=-56.7
y = $3.15 = Price of box of granola bars
Plug back into Landon's purchase to solve for pretzels.
x+5*3.15=17.55
x+15.75=17.55
x = $1.80 = price of bag of pretzels
Problem 4.
Let w = number of wood bats sold
Let m = number of metal bats sold
From sales information we have: w + m = 23
24w+30m=606
Substitution works well here. Solve for w in the first equation, w = 23 - m, and plug this into the second.
24*(23-m)+30m=606
552-24m+30m=606
6m=54
m=9 = number of metal bats sold
Therefore since w = 23-m, w = 23-9 = 14. 14 wooden bats were sold.
Explanation:
