If a Firm Adheres Strictly to the Residual Distribution Policy

question 58

Multiple Choice

If a firm adheres strictly to the residual distribution policy (with all distributions in the form of dividends) , a sale of new common stock by the company would suggest that

• A) The dividend payout ratio has remained constant.
• B) The dividend payout ratio is increasing.
• C) No dividends were paid for the year.
• D) The dividend payout ratio is decreasing.
• E) The dollar amount of investments has decreased.

---

Definitions:

5' to 3'

Refers to the orientation of nucleic acids, indicating the direction in which DNA and RNA are synthesized.

DNA Strand

A long, linear molecule made of nucleotides that carry genetic information crucial for cellular function and heredity.

Bacteriophages

Viruses that infect and replicate within bacteria, often used in molecular biology and genetics.

Viruses

Microscopic infectious agents that replicate only inside the living cells of organisms, causing a range of diseases in humans, animals, and plants.