Which One of the Following Statements Describes the Finding from Academic

question 24

Multiple Choice

Which one of the following statements describes the finding from academic studies on corporate dividend policy?

• A) Managers tend to increase regular cash dividends in response to unexpectedly high earnings.
• B) Managers tend to maintain a level dividend payment at an amount that they are relatively certain they can maintain in the future.
• C) Managers tend to focus on dividends rather than share buy-backs because institutional investors tend to prefer regular dividends.
• D) Dividend policy doesn't matter because investors can re-create dividends by selling a fraction of their shares.

---

Definitions:

Psychological Reaction

The mental and emotional response of an individual to external or internal events or stimuli.

Stressor

An external source or event that causes stress to an individual, potentially affecting their mental and physical health.

Tense

Relating to a grammatical category that expresses a time relation.

Anxious

A feeling of worry, nervousness, or unease about something with an uncertain outcome.