Which Circumstance Would Be Most Likely to Lead to a Decrease

question 69

Multiple Choice

Which circumstance would be most likely to lead to a decrease in a firm's dividend payout ratio?

• A)Its earnings become more stable.
• B)Its access to the capital markets increases.
• C)Its R&D efforts pay off, and it now has more high-return investment opportunities.
• D)Its accounts receivable decrease due to a change in its credit policy.

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Definitions:

Independent Variable

The factor in a study that the experimenter alters to see how it impacts the outcome variable.

Dependent Variable

A variable in an experiment or study whose changes depend on the manipulation of the independent variable.

Interaction Effect

A situation in statistical analysis where the effect of one independent variable on the dependent variable is different at different levels of another independent variable.

Main Effect

The effect of an independent variable on a dependent variable, isolated from other variables in an experimental study.