For which one of the following situations will the dividend-growth models work especially well?
A) mature firm with a policy of increasing its earnings and dividends at an average rate of 5% per year
B) a company with highly variable earnings and a policy of maintaining a constant 50% payout ratio
C) a company that intends to pay out all of its earnings as dividends
D) a company that is widely viewed as an attractive takeover target
Answer: A
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If variable costs increase, but price and fixed costs are held constant, the break-even point will decrease
Indicate whether this statement is true or false.
Price Co. reported net income of $12,000 for the current year. It had unrealized losses on available-for-sale securities of $1,200 after tax, and a foreign currency translation loss of $500 after tax. What is the comprehensive income for the current year?
A) $12,500 B) $11,300 C) $10,300 D) $11,500