You Are a Retired Worker Whose Income Is Derived from Your

question 66

Multiple Choice

You are a retired worker whose income is derived from your company pension plan and social security.However,you are highly dependent upon the income generated from your 401(k) plan,which is heavily weighted in stocks that pay substantial dividends.Which of the following dividend policies would you prefer?

• A) Constant dividend payment ratio
• B) Stable dollar dividend per share
• C) Small, regular dividend plus a year-end extra
• D) Any of the above would be equally desirable

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Definitions:

Strategic Behavior

Self-interested economic actions that take into account the expected reactions of others.

International Cartel

An agreement among businesses or countries from different countries to control prices, limit competition, or divide markets.

Fix Prices

The practice of setting and maintaining prices at a certain level, often agreed upon by competitors or mandated by regulation, rather than allowing them to be determined by market forces.

Intel

A leading multinational corporation that specializes in the development of semiconductor chips and microprocessors used in computers.