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    Balance Sheet Items with Sales,Profit Margin and Dividend Policy

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    On the basis of historical relationships between its balance sheet items and its sales, profit margin, and dividend policy, Thode Corporation's analysts have graphed the relationship of additional funds needed (on the Y-axis). If Thode decides to increase the percentage of earnings paid out as dividends, which of the following changes would occur in the graph?

    a. The line would shift to the right.
    b. The line would pass through the origin
    c. The line would shift to the left
    d. The slope coefficient would fall
    e. The slope coefficient would increase.

    © BrainMass Inc. brainmass.com October 9, 2019, 4:18 pm ad1c9bdddf
    https://brainmass.com/business/accounting-for-corporations/balance-sheet-items-sales-profit-margin-dividend-policy-28865

    Solution Preview

    On the basis of historical relationships between its balance sheet items and its sales, profit margin, and dividend policy, Thode Corporation's analysts have ...

    Solution Summary

    The solution explains in narrative format, how the graph will change as a result of the increase in dividends.

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