The Problem with the Constant Dividend Payout Ratio Is

question 170

Multiple Choice

The problem with the constant dividend payout ratio is

• A) investors may come to expect a specified amount.
• B) the dollar amount of the dividend fluctuates from year to year.
• C) management is reluctant to cut the dividend even if there are low profits that year.
• D) management cannot decrease the dividend when times are tough.

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Definitions:

Normal Distributions

Probability distributions that are symmetrically bell-shaped, where data tends to cluster around a central mean value.

Equal Variances

A condition where two or more populations have the same variance.

Multiple Comparison Methods

Statistical procedures used to evaluate and compare the differences among group means in a study involving more than two groups.

Population Means

The average value of a characteristic or measurement taken from every member of a population.