The Advantage of Using the Low-Regular-And-Extra Dividend Policy Is That

question 53

Multiple Choice

The advantage of using the low-regular-and-extra dividend policy is that

• A) the firm avoids giving the shareholders false hopes.
• B) the extra dividend may become a regular event.
• C) if the firm's earnings drop, so does the dividend payment.
• D) cyclical shifts in earnings may be avoided.

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Definitions:

Coronation

A ceremonial event that marks the formal investiture of a monarch or a sovereign with regal power.

Contracted

Entered into a formal and legally binding agreement between two or more parties outlining specific obligations.

Anticipatory Repudiation

A declaration by one party to a contract of their intention not to perform their future obligations as agreed, allowing the other party to treat the contract as breached and seek remedies.

Mutual Agreement

A mutual agreement is an understanding or arrangement made between two or more parties, usually detailed in a formal contract.