A Dividend Payout Ratio of 75% Would Be Typical of

question 12

Multiple Choice

A dividend payout ratio of 75% would be typical of

• A) a company whose earnings were also growing at about 75% per year.
• B) a newly listed company trying to attract investors.
• C) a firm in the rapid growth stage.
• D) a profitable firm with limited growth prospects.

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Definitions:

Equity Method

An accounting technique used to record investments in which the investor has significant influence over the investee but does not have full control.

Dividends

A portion of a company's earnings distributed to its shareholders, typically in the form of cash payments or additional shares.

Straight Line Amortization

A method of allocating the cost of an intangible asset over its useful life in equal installments.

Equity Method

An accounting technique used to record investments in which the investor has significant influence, but not control, over the investee.