If a firm pays out all of its earnings as dividends and its stockholders then elect to have all of their dividends reinvested, the company should reconsider its dividend policy and possibly move to a lower dividend payout ratio.
Answer the following statement true (T) or false (F)
True
Rationale: This is true, because if the company retains its earnings rather than paying them out, investors should receive capital gains rather than dividend income, and the taxes on those gains will be deferred until the stock is sold. Note that the money will be reinvested by the company in either case, so the risk to stockholders under dividend reinvestment and retained earnings should be the same.
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a. familiar; many b. familiar; few c. unfamiliar; many d. unfamiliar; few
The statement of stockholders' equity ________.
A) reports the number of shares and any changes during the year in preferred, common, and treasury stock B) is required to be presented along with the statement of retained earnings C) is not required by IFRS D) does not show the changes to the Retained Earnings account because that information is provided in the statement of retained earnings
The interrelated departments within a company that influence marketing decisions form the ________ environment
A) cultural B) economic C) internal D) political E) technological
After all of the account balances have been extended to the Income Statement columns of the work sheet, the totals of the debit and credit columns are $77,500 and $85,300, respectively. What is the amount of the net income or net loss for the period?
A) $7,800 net income B) $7,800 net loss C) $85,300 net income D) $77,500 net loss