Interbet.com, an Internet-based ﬁrm, just completed an exceptionally proﬁtable year. Since management is uncertain about whether future years will be as successful they should declare a(n)
______________ if they wish to share the ﬁrm's good fortune with their shareholders.

Question

Quizplus · Accepted Answer

An extra dividend would be the best choice in this situation as it allows the company to distribute additional funds to shareholders without committing to an ongoing increase in the regular cash dividend. A stock dividend, liquidating dividend, or distribution may not be appropriate if the company wants to maintain its current capital structure and operations. An increase in the regular cash dividend may not be sustainable if future years are not as profitable.

InterbetCom, an Internet-Based ﬁRm, Just Completed an Exceptionally Proﬁtable Year