The Problem with a Constant-Payout-Ratio Dividend Policy from the Shareholder's

question 33

Multiple Choice

The problem with a constant-payout-ratio dividend policy from the shareholder's perspective is that

• A) it bores the shareholders.
• B) if the firm's earnings drop, so does the dividend payment.
• C) even when earnings are low, the company must pay a fixed dividend.
• D) there is no informational content.

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Definitions:

-Oid

A suffix used in medical and biological terms indicating resemblance or similarity to something, without being the same as it.

Dehydrate

To remove water or moisture from something, or the loss of water from the body.

Ectomorph

A body type characterized by a lean and delicate build, usually with smaller bone structures and muscles.

Slender Physical Body

Description of a body type that is lean and thin, typically with minimal fat and muscle mass.