Which Type of Firm Is More Likely to Follow a Low-Regular-And-Extra-Policy

question 5

Multiple Choice

Which type of firm is more likely to follow a low-regular-and-extra-policy of dividend payout?

• A) One in a stable industry with stable earnings.
• B) One that recently experienced higher-than-normal earnings that are expected to be temporary.
• C) One that recently experienced a downswing in earnings that is expected to be temporary.
• D) none of the above

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Definitions:

Circular Flow

A model in economics that illustrates how money moves through an economy between producers and consumers, highlighting the interdependencies of different economic sectors.

Public Ownership

Ownership of assets by the government or public entities, as opposed to private individuals or companies.

Competition

the rivalry among businesses to attract customers and achieve such goals as higher sales, market share, and innovation.

Market Price

The current value at which an asset or service can be bought or sold in the open market.