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nignag [31]
1 year ago
14

In considering the arguments for the relevance of dividends, which of the following statements is/are correct? a. Shareholders w

ho are risk averse may prefer some dividends over the promise of future capital gains. b. Flotation costs on new stock sales make dividend payout more desirable, rather than issuing new stock
Business
1 answer:
stealth61 [152]1 year ago
5 0

Answer:

The correct answer is letter "A": Shareholders who are risk averse may prefer some dividends over the promise of future capital gains.

Explanation:

A dividend is a cash distribution by a company to its shareholders out of the profits of a period. Capital Gain refers to the increase in the value of a capital asset or an investment upon sale. From the two of them, dividends are safer investments since they do not rely exclusively on the sales of an asset.  

Thus, a conservative investor is likely to choose dividends over the promise of capital gains.

You might be interested in
What is the maximum amount you would pay for an asset that generates an income of $ 250,000 at the end of each of five years if
Galina-37 [17]

Answer:

170,146

Explanation:

$250,000 / (1.08)5= 170,146

3 0
1 year ago
Spokes Bikes has 18 different bicycle models that can be created in over 2 million combinations. Each combination is designed to
vampirchik [111]

Answer:

Correct option is (C)

Explanation:

Mass customization refers to manufacturing products suited for individual needs and preferences at the same time producing huge amount of products at low cost offering value to customers.

Customers are allowed to make modifications as per their requirements in the basic model offered by the organization. So customer is free to pick the color, design and model of their choice.

Spokes bikes is therefore using mass customization.

3 0
2 years ago
Gains are: a) Inflows from selling a product or service to a customer b) Increases in equity resulting from transfers of assets
valkas [14]

Answer:

C) Increases in equity from peripheral transactions of an entity

Explanation:

A) Is the description of Revenue

B) Social capital increase

6 0
2 years ago
Mark Sports Inc. sold 500 pairs of skates at $50 each in 2012. The management estimates that 4% of the skates sold will need rep
In-s [12.5K]

Answer:

Warranty repair Expense (Dr.) $200

Warranty Payable (Dr.) $200

Explanation:

The warranty expense is the estimate of probable expense that will incur due to fault in the product. The estimated repair is the 4% of skates sold. If 500 pairs of skates are sold then out of them 4% will require repair. The repair for the faulty skates will cost $10. The total cost will be $200,

500 pairs of skates * 4% * $10

7 0
1 year ago
Wentworth's Five and Dime Store has a cost of equity of 11.4 percent. The company has an aftertax cost of debt of 5 percent, and
Irina-Kira [14]

Answer:

WACC = 6.66 %

Explanation:

<em>Weighted average cost of capital is the average cost of all of the long-term types of finance used by a company weighted according to the that amount of finance used in relation to the total pool of fund</em>

WACC = (Wd×Kd)  +  (We×Ke)

After-tax cost of debt = Before tax cost of debt× (1-tax rate)

Kd-After-tax cost of debt = 5%

Ke-Cost of equity = 11.4%

Wd-Weight f debt -74%

We-Weight of equity = 26%

WACC = (0.74× 5%)  + (0.26 × 11.4%) = 6.66 %

WACC = 6.66 %

8 0
2 years ago
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