Quiz – Barnes Inc

Fundamentals of Financial Management, Concise

Brigham and Houston

09th Edition and 10th Edition

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On 12/31/15, Barnes Inc had $510 million of retained earnings on its balance sheet. This amount was exactly the same as the following year. If no earnings restatements were issued, which of the following must be CORRECT?
a. If the firm lost money, then it must have paid dividends.
b. The firm must have had zero earnings in 2015.
c. The firm must have paid out half of its earnings as dividends.
d. The firm must have not paid dividends.
e. Dividends could have been paid in 2015, but they would have had to equal the earnings for the year.

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