Podcast
Questions and Answers
What is the main reason a company may choose to have an irregular dividend policy?
What is the main reason a company may choose to have an irregular dividend policy?
- To maintain a consistent payout ratio
- Due to uncertain earnings and lack of liquid resources (correct)
- To avoid legal restrictions on dividend payments
- To finance growth and working capital requirements
Which of the following is NOT a legal constraint on a company's dividend policy?
Which of the following is NOT a legal constraint on a company's dividend policy?
- The company must maintain a minimum payout ratio (correct)
- Loan agreements may restrict dividend payments
- Dividends cannot be paid if they will impair the company's capital
- Dividends must be paid out of current earnings
What is the primary reason a company may choose a 'no dividend' policy?
What is the primary reason a company may choose a 'no dividend' policy?
- To increase shareholder goodwill
- To avoid legal restrictions on dividend payments
- To fund growth and working capital requirements (correct)
- To maintain a consistent payout ratio
Which of the following is NOT a financial constraint on a company's dividend policy?
Which of the following is NOT a financial constraint on a company's dividend policy?
How does a company's 'regular dividend' policy help maintain shareholder goodwill?
How does a company's 'regular dividend' policy help maintain shareholder goodwill?
Which of the following is NOT a merit of a stable dividend policy?
Which of the following is NOT a merit of a stable dividend policy?
Under the 'constant payout ratio' approach of a stable dividend policy, what is paid as dividends?
Under the 'constant payout ratio' approach of a stable dividend policy, what is paid as dividends?
In the 'stable rupee dividend + extra dividend' approach, what is the purpose of the extra dividend?
In the 'stable rupee dividend + extra dividend' approach, what is the purpose of the extra dividend?
Which of the following is NOT a type of stable dividend policy mentioned in the text?
Which of the following is NOT a type of stable dividend policy mentioned in the text?
What is the purpose of creating a reserve fund under the 'constant dividend per share' approach?
What is the purpose of creating a reserve fund under the 'constant dividend per share' approach?
