Which One of the Following Tends to Be the Primary

question 50

Multiple Choice

Which one of the following tends to be the primary attitude of firms' towards their dividend policy?

• A)Dividends should be increased annually no matter what.
• B)Dividend smoothing is talked about but is not really a factor that affects dividend decisions.
• C)Once a dividend is increased,it should not be decreased.
• D)Dividends should be flexible and adjusted annually in response to changes in the firm's earnings.
• E)The costs associated with cutting dividends are perceived to be less than the costs of obtaining external financing.

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Definitions:

Take Home Pay

The net amount of income that an employee receives after deductions like taxes and social security contributions.

Labor Cost

The total expenses incurred by a company to employ workers, including wages, benefits, and taxes.

Employment

Employment is a contractual relationship between an employer and an employee where the employee provides labor or services in exchange for compensation.

Payroll Tax

Contributions demanded from employers or their staff, often pegged to a percentage of the paychecks disbursed to employees.