Which of the Following Policies Would Appeal to an Investor

question 107

Multiple Choice

Which of the following policies would appeal to an investor using dividends to increase her retirement income?

• A) Maintaining smoothly increasing dividends from year to year.
• B) A residual dividend policy.
• C) Maintaining a constant dividend payout ratio.
• D) A stock repurchase plan.

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Definitions:

Absolute Advantage

The ability of a country or entity to produce a good or service in a more efficient manner (with fewer resources or in less time) than other countries or entities.

Opportunity Cost of Production

The value of the best alternative use of resources that could have been used for producing something else.

Labor Cost

Represents the total expenses incurred by employers to compensate their workforce, including wages, benefits, and taxes.

Ad Valorem Tariffs

A type of tariff calculated as a percentage of the value of the imported goods, as opposed to a fixed fee per unit.