Answer:
D. All are legitimate constraints on the dividends that firms choose to pay to shareholders.
Explanation:
All of these are legitimate constraints.
For A, a company may simply have limited cash flows and as such can not pay any dividends. They may still be making profits and may declare dividends but the payment may not be made until subsequent period when cash is available.
For B, Bondholder covenants legally bind firms as issuing authorities from certain practices, for example a bond covenant may bind a firm to have interest cover of at least 2 times retained and as such there may be very little retained earnings left to pay for dividends.
For C, some forms of businesses like insurance companies or banks are restricted by law that they can not pay dividends if it means a capital reduction. These businesses have legal capital requirements that they must maintain and thus they cannot reduce capital in lieu of making dividend payments.
Hope that helps.
Answer:
B. 9.0 times.
Explanation:
Accounts Receivable Turnover (ART) = Net credit sales/ Average accounts receivable
Net credit sales = <em>$7,200,000</em>
Average accounts receivable = (beginning AR - ending AR) /2
Average Accounts receivable = ($820,000 + $780,000)/2
Average AR = <em>$800,000</em>
Therefore Accounts receivable turnover = $7,200,000/800,000 = 9.0 times
Answer:
a.
Explanation:
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Answer:
Marginal cost: $13.70
Missing question:
Additional cost from increasing their output by one unit.
Explanation:
The company will inccur only the variable cost as the fixed cost are within the relevant range:
Direct materials $ 6.85
Direct labor $ 3.60
Variable manufacturing overhead $ 1.25
Sales commissions $ 1.50
Variable administrative expense $ 0.50
Total variable cost: $13.70
producing an additional unit will genrate marginal cost for $13.70
