Each of the Following Factors May Cause a Corporation to Lower

question 9

Multiple Choice

Each of the following factors may cause a corporation to lower its dividend payout ratio except:

• A) the corporation's earnings predictability is high.
• B) the corporation's current and quick ratios are higher than industry average.
• C) the corporation's retained earnings balance is high.
• D) current common shareholders are unable to participate in new equity offerings.

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Definitions:

Public Bureaucracies

Complex structures in government that manage policies and administer public services through a fixed set of rules and procedures.

Competitive Market Pressures

Forces within a free market that influence companies to improve products, lower prices, and become more efficient to stay competitive.

Public Goods

Goods that are non-excludable and non-rivalrous, meaning they are available to all members of society and one person's use does not diminish another's.

Private Goods

Products and services that are excludable and rivalrous, meaning only paying customers can consume them, and one person's consumption prevents another's.