A company's policy toward dividends and growth could best be determined by examining the
A)statement of financial position.
B)income statement.
C)statement of changes in equity.
D)statement of cash flows.

Question

Quizplus · Accepted Answer

The statement of changes in equity provides information on the company's earnings, dividends, and any additional investments or withdrawals by shareholders. By analyzing this statement, it is possible to determine the company's policy towards dividends and growth. For example, if the company consistently retains earnings and reinvests them into the business, this indicates a focus on growth rather than paying dividends to shareholders. On the other hand, if the company pays out a significant portion of its earnings as dividends, it may prioritize shareholder return over growth.

A Company's Policy Toward Dividends and Growth Could Best Be