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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
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 Business Logistics Corp. 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. Mainway Toys Co.'s dividends represent the portion of earnings left after it has made all profitable investments. O Universal Drugmakers Inc.'s annual dividends increase by the same amount, or percentage, every year. Extensive Enterprises Inc. 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
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