If a Firm Follows a Stable Dividend Policy While Its

question 105

Multiple Choice

If a firm follows a stable dividend policy while its earnings are growing and no new stock has been issued, what would happen to the firm's dividend payout ratio over time?

• A)The payout ratio will decrease.
• B)The payout ratio will increase.
• C)The payout ratio will decrease initially and then increase.
• D)The payout ratio will remain stable and not change.

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Definitions:

Online Exchanges

Digital platforms that facilitate the buying and selling of goods or services among businesses or consumers.

Supply Chain

A network of organizations, people, activities, information, and resources involved in creating and moving a product or service from suppliers to customers.