A Constant Payout Policy for Dividends Involves

question 4

Multiple Choice

A constant payout policy for dividends involves:

• A)a constant total amount of dividends paid each year.
• B)a constant ratio of dividends to profit and a constant amount of dividends paid from year to year.
• C)consideration given to profitable investment proposals.
• D)a constant ratio of dividends to profit but not a constant amount of dividends paid from year to year.

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Definitions:

Credit for Returns

A financial adjustment made by a seller to the account of a buyer to reflect returned goods.

Discount Period

The discount period is the time frame during which a buyer can take advantage of a purchase discount offered by the supplier for early payment.

Total Amount Collected

The sum of money received from various sources, including sales, investments, financing, and other business activities.

Gross Profit

The difference between revenue and the cost of goods sold, representing the basic profitability of items or services before deducting operating expenses.