A policy under which the firm pays dividends only after its capital investment needs are met, and while maintaining a constant debt/equity ratio, is called a ________.

A) Clientele effect. B) Homemade dividend. C) Bird-in-the-hand approach. D) Constant dividend growth model. E) Residual dividend approach.

Most firms are reluctant to ________ because of the associated implications concerning the firm.

A) Pay a liquidating dividend. B) Pay a special dividend. C) Increase a cash dividend. D) Reduce a regular cash dividend. E) Pay an extra dividend.