Dividends Are Likely to Shift Up and Down as Earnings

question 24

True/False

Dividends are likely to shift up and down as earnings fluctuate so that managers can maintain a stable payout ratio.

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Definitions:

Agreement Requirement

The necessity for all parties involved to mutually consent and understand the terms for an arrangement or contract to be valid.

Writing

Refers to the act or process of marking coherent words onto a document or medium, often used in legal contexts to denote the physical manifestation of agreements, laws, or records.

Commercial Nature

Pertaining to or characterized by activities aimed at the exchange or buying and selling of goods and services.

Contracting Parties

The entities (individuals or companies) that enter into a contractual agreement, each undertaking specific obligations outlined within.