A Residual Dividend Policy Differs from a Stable Dividend Policy

question 34

Multiple Choice

A residual dividend policy differs from a stable dividend policy in the following respect:

• A)Dividends can only be stable under a residual policy if profits are constant.
• B)Dividends under the residual policy method fluctuate from year to year depending on profits.
• C)Dividends are a function of profits under the stable policy method but are a function of investment needs under the residual policy method.
• D)Dividends are a function of long-term profits under the stable policy method but are a function of investment needs under the residual policy method.

---

Definitions:

Approach-Avoidance Motivation

A psychological concept that describes the conflict involved when a person is faced with a choice or goal that has both attractive and unattractive aspects.

Implicit Motives

Describes unconscious desires, needs, or aspirations that influence an individual's behavior.

Explicit Motives

Refers to motivations that are consciously recognized and can be verbally expressed by an individual.

Cognitive Performance

The ability to perform tasks that require attention, memory, reasoning, problem solving, and decision-making.