If a Company Strictly Adheres to a Constant Payout Ratio

question 99

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.

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Definitions:

Performance Measures

Metrics or indicators used to evaluate and track the efficiency, effectiveness, and productivity of an organization, employee, or process.

Rewarding Outcomes

Benefits or positive results achieved from specific actions or decisions, often used to motivate behavior or assess the success of projects.

Incentive Contract

An agreement designed to motivate performance by aligning the interests of parties, typically involving rewards for achieving specified objectives.

Additional Risk

Extra exposure to uncertainty or potential financial loss that comes with certain investments or business activities.