Which of the Following Gini Ratios Indicates the Highest Degree

question 162

Multiple Choice

Which of the following Gini ratios indicates the highest degree of income inequality?

• A)0.78
• B)0.65
• C)0.29
• D)0.42

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Definitions:

Residual Dividend Policy

Residual Dividend Policy is a strategy where a company pays dividends out of the residual or leftover equity only after all project capital needs are met.

Dividend Irrelevance Theory

Holds that dividend policy has no effect on either the price of a firm’s stock or its cost of capital.

Shareholders

Shareholders are individuals or entities that own one or more shares of stock in a public or private corporation, granting them certain rights such as voting on corporate matters and receiving dividends.

Buying and Selling

The basic act of trading or exchanging goods, services, or financial instruments, such as stocks or currencies.