A business has 1 million at its disposal and managers feel that this could either be invested
Question:
A business has £1 million at its disposal and managers feel that this could either be invested in new production facilities or be paid to shareholders as a dividend. What does the separation theorem suggest that the business should do? Can the business both pay the dividend and make the investment? Explain.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 100% (QA)
The separation theorem says that the investment should be undertaken if it generates wealth ...View the full answer
Answered By
Antony Sang
I am a research and academic writer whose work is outstanding. I always have my customer's interests at heart. Time is an important factor in our day to day life so I am always time conscious. Plagiarism has never been my thing whatsoever. I give best Research Papers, Computer science and IT papers, Lab reports, Law, programming, Term papers, English and literature, History, Math, Accounting, Business Studies, Finance, Economics, Business Management, Chemistry, Biology, Physics, Anthropology, Sociology, Psychology, Nutrition, Creative Writing, Health Care, Nursing, and Articles.
5.00+
2+ Reviews
10+ Question Solved
Related Book For
Question Posted:
Students also viewed these Business questions
-
Suppose the US Congress is considering bills that would significantly lower taxes on American consumers. a. What would be the implications of this policy change for the total demand for goods and...
-
Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...
-
Read the case study "Southwest Airlines," found in Part 2 of your textbook. Review the "Guide to Case Analysis" found on pp. CA1 - CA11 of your textbook. (This guide follows the last case in the...
-
Foreman Publishing Companys income for the most recent quarter was $500,000, and the average net book value of assets during the quarter was $1.5 million. If the company has a required rate of return...
-
Briefly explain whether you agree with the following statement: "I don't believe the government price statistics. The CPI for 2014 was 237, but I know that the inflation rate couldn't have been as...
-
The fact that e-commerce is conducted based on universal standards decreases market entry costs for merchants. Discuss with relevant examples.
-
A simplified schematic drawing of the carburetor of a gasoline \((S=0.75)\) engine is shown in Fig. P5.96. The throat area is \(0.5 \mathrm{in.}^{2}\). The running engine draws air downward through...
-
You are investing your money and opening a fast-food Mexican restaurant that accepts only cash for payments. You plan on periodically issuing coupons through the mail and in local newspapers. You are...
-
Mike Scott was a high school graduate who worked as a receptionist in the corporate offices of a large corporation. Scott had no particular plans for his career development; However, he wanted to...
-
Jill Beaver was an employee at RGIS Inventory Specialists. She became ill while on vacation with acute sinusitis, bronchitis, and an ear infection. She was prescribed an antibiotic by a physician,...
-
Explain why, according to the separation theorem, the financing method (equity or loan) does not affect shareholders wealth.
-
A monopoly supplier charges its customers very high prices. Is this consistent with the objective of maximising shareholders wealth? Explain your response.
-
The December 31, 2015, adjusted trial balance for Fightin Blue Hens Corporation is presented below. Required: 1. Prepare an income statement for the year ended December 31, 2015. 2. Prepare a...
-
An agreement that is inherently anticompetitive is illegal per se. (True/False)
-
Explain how each of the following situations illustrates one of the five principles of interaction. a. Using eBay any student who wants to sell a used textbook for at least $30 is able to sell it to...
-
When does price discrimination violate antitrust laws?
-
Under the rule of reason, conduct is unlawful if its anticompetitive effects outweigh its competitive benefits. (True/False)
-
Define monopolization.
-
Tiffany Crissler was talking to another accounting student, Bill Tyrone. Upon discovering that the accounting department offered an upper-level course in cost measurement, Tiffany remarked to Bill,...
-
Will the prediction interval always be wider than the estimation interval for the same value of the independent variable? Briefly explain.
-
What potential problems arise when interpreting financial ratios based on statement of financial position figures? Why is this a particular problem for external users?
-
Which of one the above category of ratios should be of most value for short-term lenders?
-
Both Ali plc and Bhaskar plc operate wholesale electrical stores throughout the UK. The financial statements of each business for the year ended 31 December last year are as follows: Required: For...
-
How do you prioritize information in a memo to ensure that the most important points are communicated first? Discuss the use of information hierarchy in guiding the readers attention.
-
Memos often require the reader to take action. How do you craft a call to action that is clear and compelling? Provide examples of effective calls to action in memo writing.
-
Beth and jerry own a residential home valued at approximately $250,000. while they were away on vacation Lightning struck their house causing a large fire that would approximately $125,000 of damage...
Study smarter with the SolutionInn App