The bird-in-the-hand dividend theory suggests that A) high ...

[nenivikky]

The bird-in-the-hand dividend theory suggests that
 
  A) high dividends increase stock value because shareholders are more certain of the dividend
  yield than of potential future capital gains.
  B) high dividends decrease stock value because dividend payments take money out of the
  corporate nest and reduce the ability of the corporation to function effectively.
  C) high dividends increase stock value because capital markets are inefficient and dividends are
  the only sure way to get money from an equity investment.
  D) high dividends increase stock value because shareholders believe they can earn a higher
  return than the company.

Question 2

Ribbon Industries reported sales of 3 million and net income of 400,000 for 2010. The retained
  earnings balance at the end of 2012 is 7 million. Ribbon Industries has a dividend payout ratio of
  30.
 
  If sales are expected to increase by 25 next year, what will be the projected balance in
  retained earnings using the percent of sales method?
  A) 7,350,000 B) 6,720,000 C) 7,280,000 D) 8,750,000

[cloud]

Answer to Question 1

A

Answer to Question 2

C

[nenivikky]

Excellent

[xiazhe]

Gracias!