Question

In: Finance

If your stockholders are primarily very wealthy, which of the following dividend policies would be best...

If your stockholders are primarily very wealthy, which of the following dividend policies would be best for your firm:

a) a fluctuating dividend policy with low payout ratio

b) a fluctuating dividend policy with steady payout ratio

c) a steady dividend policy with a low payout ratio

d) a steady dividend policy with a high payout ratio

Solutions

Expert Solution

The answer is

a) a fluctuating dividend policy with low payout ratio

Since the stockholders are wealthy, they are not reliant on dividend income

Hence, the firm can retain more funds and invest in profitable projects.

Hence, a fluctuating poilcy with low payout suits best

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

If your stockholders are primarily very wealthy, which of thefollowing dividend policies would be best...
If your stockholders are primarily very wealthy, which of the following dividend policies would be best for your firm:a) a fluctuating dividend policy with low payout ratiob) a fluctuating dividend policy with steady payout ratioc) a steady dividend policy with a low payout ratiod) a steady dividend policy with a high payout ratio
Which one of the following best states the primary goal of stockholders?
Which one of the following best states the primary goal of stockholders?A. maximize current dividends per shareB. maximize the current value per shareC. increase cash flow and avoid financial distressD. minimize operational costs while maximizing firm efficiencyE. maintain steady growth while increasing current profits
Would you set different dividend policies based on the perceived demographic of your investor? Does the...
Would you set different dividend policies based on the perceived demographic of your investor? Does the firm's life cycle impact this decision?
Would you set different dividend policies based on the perceived demographic of your investor? Does the...
Would you set different dividend policies based on the perceived demographic of your investor? Does the firm's life cycle impact this decision?
Which of the following factors shift primarily the demand curve and which factors shift primarily the...
Which of the following factors shift primarily the demand curve and which factors shift primarily the supply curve: per capita income changes; new technologies; population growth; tastes and preferences; price inputs used in production; prices of other goods consumed; prices of substitute goods in production?
Which markdown policy would be best for sporting goods? Explain your reasoning. Would your answer be...
Which markdown policy would be best for sporting goods? Explain your reasoning. Would your answer be the same for a specialty apparel store?
51. Which of the following would be the best example of an environment(s) that would contribute...
51. Which of the following would be the best example of an environment(s) that would contribute to a client’s increased confusion: a) Poor lighting, and excessive noise b) Unfamiliar surroundings such as furniture and pictures c) Quiet music playing d) Both a and b a) Poor lighting, and excessive noise b) Unfamiliar surroundings such as furniture and pictures c) Quiet music playing d) Both a and b 52. Persons with acute confusion should be: a) Restrained or confined b) Given...
Which of the following would not represent a financing activity? Paying dividends to stockholders. An investment...
Which of the following would not represent a financing activity? Paying dividends to stockholders. An investment of capital by the owners. Borrowing money from a bank to purchase new equipment. Buying supplies. The obligations and debts of a business are referred to as: equities. assets. dividends. liabilities. Which of the following financial statements shows how net income (loss) and dividends impacted a stockholders' equity account? Statement of Retained Earnings Balance Sheet Statement of Cash Flows Income Statement Golden Enterprises started...
1.Which of the following would not be included in a company’s total stockholders’ equity? Investments in...
1.Which of the following would not be included in a company’s total stockholders’ equity? Investments in equity securities Additional paid-in capital Retained earnings Treasury stock 2.How do “dividends in arrears” on cumulative preferred stock appear in the financial statements? as a liability on the balance sheet as a contra equity item as an expense on the income statement dividends in arrears will not appear as a line item within the financial statements, but must be disclosed in the notes to...
Which of the following statements best describes alternatives to short-term financing policies? Select one: a. A...
Which of the following statements best describes alternatives to short-term financing policies? Select one: a. A firm following an aggressive financing policy would finance all its permanent NOWC with long-term capital. b. If a company receives trade credit under terms 2/10, net 30, this implies the company has 10 days of free trade credit. c. A conservative financing policy is one in which the firm finances all of its fixed assets with long-term capital and part of its permanent net...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT