Asked by
Jonathan Hernandez
on Dec 09, 2024Verified
Which one of the following is considered to be the primary goal of a compromise dividend policy?
A) The avoidance of cutting back on positive net present value projects.
B) Maintaining a constant debt-equity ratio.
C) The avoidance of reducing the dividend amount.
D) Maintaining a target dividend payout ratio.
E) Avoiding the need to sell new equity.
Compromise Dividend Policy
A dividend policy that seeks a balance between retaining earnings for company growth and paying dividends to shareholders, accommodating various investors' preferences.
Net Present Value
A financial metric that calculates the present value of all future cash flows (positive and negative) expected from a project or investment, discounted back to their present value.
Debt-Equity Ratio
A measure showing the relative contributions of debt and shareholders' equity in a company’s asset financing.
- Understand and expound on the significant aspects that sway decisions on dividend policies within businesses.
Verified Answer
AG
Learning Objectives
- Understand and expound on the significant aspects that sway decisions on dividend policies within businesses.