The Best Dividend Payout Ratio

question 43

Multiple Choice

The best dividend payout ratio:

• A)approximates 50%.
• B)continues at the same level as was historically paid.
• C)is similar to the industry average.
• D)is higher than that of competitors.
• E)does not follow any rule of thumb for dividend payout.

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Definitions:

Normal Populations

Populations that follow a normal distribution, where the majority of data points are concentrated around the mean value.

Standard Error

A statistical term that measures the accuracy with which a sample distributes around the population mean; it is the standard deviation of the sampling distribution.

Sampling Distribution

The probability distribution of a given statistic based on a random sample, used to estimate population parameters.

Formal Charge

Used to calculate the charge of an atom in a molecule, assuming that electrons in all chemical bonds are shared equally between atoms.