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:

Property Taxes

Taxes assessed on real estate by local government, based on the assessed value of the property.

Mixed Cost

An expense that contains both variable and fixed cost components, changing in total with the level of activity but also containing a constant element.

Straight-Line Depreciation

A method used in accounting to allocate the cost of a tangible asset over its useful life evenly.

Electricity Costs

The financial charges for the consumption of electrical energy by a business, forming part of its operating expenses.