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Question
Firms that follow the constant payout ratio dividend policy have:
a. stable dividend payments, even when earnings fluctuate.
b. fluctuating dividend payments, even when earnings are stable.
c. higher costs of equity when earnings are stable than similar firms that have fluctuating earnings.
d. lower costs of retained earnings when earnings are volatile than similar firms that have stable earnings.
e. fluctuating dividend payments when earnings fluctuate.
Answer
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Related questions
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Which of the following is true about financial institutions in the United States compared to those in other countries?
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e. Firms with relatively low debt ratios have higher expected returns when business is poor.