The Advantage of Using the Low-Regular-And-Extra Dividend Policy Is That

question 55

Multiple Choice

The advantage of using the low-regular-and-extra dividend policy is that

• A) the firm avoids giving the shareholders false hopes.
• B) if the firm's earnings drop, so does the dividend payment.
• C) the extra dividend may become a regular event.
• D) cyclical shifts in earnings may be avoided.

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Definitions:

Homeostatic Mechanisms

The regulatory mechanisms that maintain homeostasis.

Energy Expenditure

The total amount of energy used by an organism for basic bodily functions and physical activity.

Metabolic Processes

The chemical reactions that occur within a living organism to maintain life.

Torpor

A state of decreased physiological activity in an animal, usually by a reduced body temperature and metabolic rate.