Explain the Causes of the U

question 113

Essay

Explain the causes of the U.S.Savings and Loans crisis of the early 1980s.

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Definitions:

Earnings in Dividends

This term is not standard; likely refers to the portion of a company's earnings distributed to shareholders in the form of dividends.

Residual Dividend Policy

A strategy whereby companies pay dividends from the residual or leftover equity only after all project capital needs are met.

Dividend Payout Ratio

The fraction of net income a firm pays to its shareholders in dividends, expressed as a percentage of the company's total net income.

Capital Budgeting

The process of evaluating and selecting long-term investments that are consistent with the firm's goal of wealth maximization.