Question

All of the following uses of annual earnings would contribute toward an increase in shareholder value except?

1) Increasing dividends
2) Investing in research and development
3) Expanding into new markets
4) Reducing employee salaries

Answer 1

Increasing dividends, investing in research and development, and expanding into new markets can all contribute toward an increase in shareholder value, but reducing employee salaries would not.4) Reducing employee salaries

Step-by-step explanation:

Increasing dividends, investing in research and development, and expanding into new markets can all contribute toward an increase in shareholder value. These actions can lead to higher profits and growth opportunities for the company, which can positively impact the value of its shares. However, reducing employee salaries would not contribute toward an increase in shareholder value. While it may temporarily reduce costs for the company, it can negatively affect employee morale and productivity, which can ultimately impact the company's overall performance and shareholder value.