1. In the real world, dividends
   1. Are usually more stable than earnings.
   2. Fluctuate more widely than earnings.
   3. Tend to be a lower percentage of earnings in mature firms.
   4. Are usually changed every year to reflect earnings changes, and these changes are randomly higher to lower, depending on whether earnings increased or decreased.
   5. Are usually set as a fixed percentage of earnings. Once the percentage is set, then dividend policy is on auto pilot and the dividend actually paid depends strictly on earnings.