AFB,Inc'S Dividend Policy Is to Maintain a Constant Payout Ratio

question 17

Multiple Choice

AFB,Inc.'s dividend policy is to maintain a constant payout ratio.This year AFB,Inc.paid out a total of $2 million in dividends.Next year,AFB,Inc.'s sales and earnings per share are expected to increase.Dividend payments are expected to

• A) remain at $2 million.
• B) increase above $2 million.
• C) decrease below $2 million.
• D) increase above $2 million only if the company issues additional shares of common stock.

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