Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

4. Dividend practices In general, firms' dividend practices fit into the categories listed in the following table (constant payout ratio, low-regular-dividend-plus-extras, residual dividend policy, and

image text in transcribed
4. Dividend practices In general, firms' dividend practices fit into the categories listed in the following table (constant payout ratio, low-regular-dividend-plus-extras, residual dividend policy, and stable, predictable dividend policies). Identify the category that each practice corresponds to in the table. Constant Payout Ratio Low-Regular- Dividend- Plus-Extras Residual dividend Stable, Predictable Dividend Practice Specialized Chemicals Inc.'s annual dividend has increased by 1% every year since 1966. ABCDE Telecom Inc. uses a policy that allows it to pay a small, consistent dividend in years when earnings are low or large capital investments are required. In some years, the firm pays an extra dividend when excess funds are available. Omni Consumer Products Co. pays out a set percentage of its income each year in the form of dividends. This causes the firm's dividends to fluctuate from year to year. InputOutzone Inc. pays dividends only if more earnings are available than are needed to support the optimal capital budget. O O o

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Sustainable Value Creation An Inevitable Challenge To Business And Society

Authors: Teun Wolters

1st Edition

3031353501, 978-3031353505

More Books

Students also viewed these Finance questions