The Policy of Changing the Capital Structure Gradually Over Time

question 78

Multiple Choice

The policy of changing the capital structure gradually over time by funding new capital projects disproportionately with the type of capital you want to increase in the capital structure is referred as ___________________.

• A) Separation principle
• B) Overinvestment problem
• C) Passive capital structure management
• D) Active captive structure management

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Definitions:

Dividend Yield

A financial ratio that indicates how much a company pays out in dividends each year relative to its share price.

Quarterly Dividends

Dividends paid by a corporation to its shareholders at regular intervals every three months.

Dividend Yield

The annual dividend a company provides vis-a-vis its stock price, presented as a financial ratio.

Dividend Income

Income received from owning shares in a company that pays dividends to its shareholders.