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Question 4 5 points Save Answer In the real world, dividends a. are usually more stable than earnings. b. are usually set as a fixed
Question 4 5 points Save Answer In the real world, dividends a. are usually more stable than earnings. b. are usually set as a fixed percentage of earnings, e.g., at 40% of earnings, so if EPS = $2.00, then DPS would equal $0.80. Once the percentage is set, then dividend policy is on "automatic pilot" and the dividend actually paid depends strictly on earnings. C. tend to be a lower percentage of earnings for mature firms. d. fluctuate more widely than earnings. e. are usually changed every year to reflect earnings changes, and these changes are randomly higher to lower, depending on whether earnings increased or decreased
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