Which of the Following Is the Most Important Factor Motivating

question 83

Multiple Choice

Which of the following is the most important factor motivating dividend policy for most large corporations?

• A)Changes in EPS
• B)Maintain constant dividend payout ratio
• C)Avoiding flotation costs of selling new stock
• D)Avoid reducing dividends per share

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Definitions:

Reverse Stock Split

A corporate action where a company decreases the number of its existing shares to increase the share price without changing the company’s market capitalization.

Liquidating Dividend

A special dividend paid to shareholders when a company is partially or completely dissolved, representing a return of capital rather than profit.

High-Dividend Payout

A company's policy or practice of distributing a large portion of its profits to shareholders in the form of dividends.