The Problem with a Constant-Payout-Ratio Dividend Policy from the Shareholders

question 22

Multiple Choice

The problem with a constant-payout-ratio dividend policy from the shareholders' perspective is that ________.

• A) it pays constant dividend irrespective of the earnings of a firm
• B) if the firm's earnings drop, the dividends tend to be lower
• C) even when earnings are low, the company must pay a fixed dividend
• D) there is no uniformity in this type of dividend policy

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Definitions:

Cellular Immunity

A part of the immune response that involves the activation of immune cells to defend the body against pathogens, distinct from antibody-mediated immunity.

T and B Lymphocyte

Types of white blood cells that play crucial roles in the immune system; T lymphocytes help regulate immune responses, whereas B lymphocytes produce antibodies.

AIDS

Acquired Immunodeficiency Syndrome (AIDS) is a chronic, potentially life-threatening condition caused by the human immunodeficiency virus (HIV), which damages the immune system and impairs the body's ability to fight infections and disease.

Immunologic Defenses

The protective mechanisms in the body’s immune system that detect and neutralize pathogens like bacteria, viruses, and other harmful agents.