Which of the Following Factors Leads to a High Dividend-Payout

question 12

Multiple Choice

Which of the following factors leads to a high dividend-payout ratio?

• A) Existence of impairment of capital rule
• B) Stockholders' desire for future income rather than current income
• C) Management's preference for limited ownership control
• D) Excess availability of cash in spite of investing in profitable projects
• E) Debt contract restrictions to maintain certain financial measures

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Definitions:

Checkbook Balance

The amount of money available in an account, tracking all deposits and withdrawals recorded in the checkbook register.

Outstanding Checks

Checks that have been written and recorded in the issuer's accounting records but have not yet been cleared by the bank.

Automatic Transfer

A banking service that moves funds automatically from one account to another at scheduled intervals or under specific conditions.

Reconciled Balance

The balance of an account after adjustments have been made for discrepancies or outstanding items.