In the Real World, Dividends

question 25

Multiple Choice

In the real world, dividends

• A) are usually more stable than earnings.
• B) fluctuate more widely than earnings.
• C) tend to be a lower percentage of earnings for mature firms.
• D) are usually changed every year to reflect earnings changes, and these changes are randomly higher or lower, depending on whether earnings increased or decreased.
• E) are usually set as a fixed percentage of earnings, e.g., at 40% of earnings, so if eps = $2.00, then dps will equal $0.80. once the percentage is set, then dividend policy is on "automatic pilot" and the actual dividend depends strictly on earnings.

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Definitions:

Standard Input

A method for receiving input from the user, typically through the keyboard, in a program.

Standard Output

The default data stream where a program writes its output data, typically displayed to the console or terminal.

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Files in programming that typically contain function prototypes, macro definitions, and include directives for other files, used to share information among various source files in a program.