Questions and Answers
What is the main reason a company may choose to have an irregular dividend policy?
Due to uncertain earnings and lack of liquid resources
Which of the following is NOT a legal constraint on a company's dividend policy?
The company must maintain a minimum payout ratio
What is the primary reason a company may choose a 'no dividend' policy?
To fund growth and working capital requirements
Which of the following is NOT a financial constraint on a company's dividend policy?
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How does a company's 'regular dividend' policy help maintain shareholder goodwill?
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Which of the following is NOT a merit of a stable dividend policy?
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Under the 'constant payout ratio' approach of a stable dividend policy, what is paid as dividends?
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In the 'stable rupee dividend + extra dividend' approach, what is the purpose of the extra dividend?
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Which of the following is NOT a type of stable dividend policy mentioned in the text?
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What is the purpose of creating a reserve fund under the 'constant dividend per share' approach?
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