If a Company Strictly Adheres to a Constant Payout Ratio

question 82

Multiple Choice

If a company strictly adheres to a constant payout ratio policy,its dividend amount will

• A) remain constant period by period
• B) vary as earnings vary
• C) steadily increase over time
• D) move up in a "stair step" pattern over time.

---

Definitions:

Monthly Salary

A fixed amount of money or compensation paid to an employee by an employer for services rendered during a month.

Commission

A fee paid to an agent or employee for transacting a piece of business or performing a service, often a percentage of the transaction.

Appliances

Electrical or mechanical machines that perform domestic functions, such as refrigerators or washing machines.

Net Proceeds

The final amount of money received from a transaction after deducting all associated costs and expenses.