A Policy of Dividend "Smoothing" Refers To

question 30

Multiple Choice

A policy of dividend "smoothing" refers to:

• A) maintaining a constant dividend payout ratio.
• B) keeping the regular dividend at the same level indefinitely.
• C) maintaining a steady progression of dividend increases over time.
• D) alternating cash dividends with stock dividends.

---

Definitions:

Corporate Tax Rates

The rate at which businesses are taxed on their profits by the government, varying between countries and sometimes within jurisdictions based on company size or revenue.

Subjective Approach

A method of decision-making or valuation based on personal judgments and opinions rather than objective data.

Risk Classes

Categories of investments grouped together based on their similar level of risk.

Discount Rates

The interest rate used in discounted cash flow (DCF) analysis to determine the present value of future cash flows.