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. In general, firms' dividend practices fit into the categories listed in the following table (constant payout ratio, low regular dividend plus extras, residual dividend
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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 Praxis Corp. has received a lot of negative feedback from its investors because it uses a dividend policy that pays a set percentage of its net income even though the company's earnings fluctuate dramatically. The investors feel that this dividend policy creates too much uncertainty about the expected o dividend each year. 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. The goal of InputOutzone Inc.'s dividend policy is to reinvest earnings into the firm if the rate of return that the firm can earn on reinvested earnings exceeds the rate that investors, on average, can earn on other investments of comparable risk. If there are any funds remaining after this reinvestment, they are paid out in the form of dividends. Specialized Chemicals Inc.'s annual dividend has increased by 1% every year O O since 1966Step by Step Solution
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