Which of the Following Policies Represents a Compromise Between a Stable

question 6

Multiple Choice

Which of the following policies represents a compromise between a stable, predictable dividend and a constant payout ratio?

• A) The Free cash flow policy
• B) The Residual dividend policy
• C) The Dividend reinvestment policy
• D) The Constant payout ratio policy
• E) The Low regular dividend plus extras policy

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Definitions:

Forbearance

The act of refraining from enforcing a right, obligation, or debt, often temporarily and under specific conditions.

Accord and Satisfaction

A legal agreement where a dispute is settled by the parties involved, and a payment is made that is accepted as full resolution.

Bankruptcy

A legal process for individuals or entities that cannot repay their outstanding debts, allowing for their assets to be distributed among creditors.

Promissory Estoppel

A legal principle preventing a party from backing out of a promise made, when the other party has relied on that promise to their detriment.