Previous Question 17 Next> If a management team wishes to undertake efforts spec
ID: 356505 • Letter: P
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Previous Question 17 Next> If a management team wishes to undertake efforts specifically aimed at helping the company meet or beat the investor-expected increases in the company's stock price in upcoming years then it should pursue actions to increase the company's current ratio and thereby provide a very big boost to quickly achieving an A+ credit rating utlize a portion of cash flows from operations to issue shares of common stock and use the cash to pay off bank loans o outspend rivals on corporate social responsibility initiatives and charitable contributions, so as to encourage bigger numbers of investors who strongly support corporate social responsibility initiatives to purchase shares of the company's common stock o increase the annual dividend payments to shareholders most every year o increase the amount of earnings retained in the business, thereby building a large amount of O cash held in the company's retained earnings account on its Balance Sheet Copying, redistributing, or website posting is expressly prohibited and constitutes copyright violation Copyright2018 by Glo-Bus Sotware, Inc c Previous Next OExplanation / Answer
Answer: Option (D) - Increase the annual dividend payments to shareholders most every year
Explanation: Dividends are the payments made by a company to its investors for owning the company’s stock. When a firm decides to pay dividend to its investors, it increases the confidence of the investors in the firm’s capabilities and gives them an assurance that the company is doing well. It also increases their willingness to pay more and invest more with the goal of earning higher dividends. Naturally, the stock price of a company will increase when its demand is high, that is more number of investors are willing to invest in the company by purchasing its stocks. Therefore, an increase in the annual dividend payments to shareholders can positively impact the company’s stock price because of which company will be able to meet or even beat the investor-expected increases in the stock price of the company.
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