Asked by
Vania Rojas
on Nov 07, 2024Verified
Which of the following is the best definition of the target payout ratio?
A) Stocks attract particular groups based on dividend yield and the resulting tax effects.
B) Price range between highest and lowest prices at which a stock is traded.
C) A firm's long-term desired dividend-to-earnings ratio.
D) Common stock on which dividends and capital gains are repackaged and sold separately.
E) An increase in a firm's shares outstanding without any change in owner's equity.
Target Payout Ratio
A firm’s long-term desired dividend–earnings ratio.
Dividend Yield
A financial ratio that shows how much a company pays out in dividends each year relative to its stock price.
Price Range
The spread between the lowest and highest prices at which a commodity or asset is traded over a certain period of time.
- Identify and explain the significance of the target payout ratio in dividend policy.
Verified Answer
ES
Learning Objectives
- Identify and explain the significance of the target payout ratio in dividend policy.
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