If a firm reports $25 million of retained earnings on its balance sheet, could the board of directors declare a $25 million cash dividend without any concerns? Explain why or why not
What will be an ideal response?
The retained earnings on a firm's balance sheet represents the accumulation of net income over time that was not paid out as dividends. When realized, the R/E were not necessarily a cash flow thus we cannot assume cash is equal to the R/E figure. Further, the R/E are a source of internal funding used to finance existing assets. Thus, paying out R/E as dividends would almost certainly cause concerns.
You might also like to view...
Joe pays Ann to mow his lawn, but Ann mows Donna's lawn by mistake. Donna peeps out her window and sees Ann mowing, yet says nothing to Ann about her mistake as Donna needs to have her lawn mowed. When Ann approaches Donna for payment, Donna refuses, arguing that she had never asked Ann to mow her lawn. Under these circumstances, Ann can recover payment from Donna on a(n) ________ contract basis.
A. executory B. void C. quasi D. express
The future poses many challenges for marketing managers because
A. long-run consumer welfare is becoming more important. B. consumers' privacy rights are harder to protect. C. environmental damage is no longer a hidden cost. D. international competition makes it even harder to gain a competitive advantage. E. All these answers are correct.
Straight salary is generally used when the products and services have short selling cycles
Indicate whether the statement is true or false
Eli draws a check for $1,500 on Town Bank. The check is made payable to the order of Carmen. Carmen endorses and sells the check to Nita. At Nita's request, Town Bank certifies the check. In this scenario, which of the following is a true statement?
A. Eli becomes secondarily liable on the check. B. Carmen becomes secondarily liable on the check. C. Town Bank becomes primarily liable on the check. D. Eli becomes primarily liable on the check.