Financial Analysis: Dividend Policy
Not what you're looking for?
1. Dividend Policy. Here are several assertions about typical corporate dividend policies. Which of them are true? Write out a corrected version of any false statements.
- Most companies set a target dividend payout ratio.
- They set each year's dividend equal to the target payout ratio times that year's earnings.
- Managers and investors seem more concerned with dividend changes than dividend levels.
- Managers often increase dividends temporarily when earnings are unexpectedly high for a year or two.
2. Dividend Policy. "Risky companies tend to have lower target payout ratios and more gradual adjustment rates." Explain what is meant by this statement. Why do you think it is so?
Purchase this Solution
Solution Summary
This solution is comprised of a concise, 295 word response which explains the various assertions related to the dividend policy.
Solution Preview
1.
- Most companies set a target dividend payout ratio.
True.
- They set each year's dividend equal to the target payout ratio times that year's earnings
False, while the manager may have a target payout ratio, it is not applied straight away. The dividends are smoothed, so in some years the payout may be different than the target, but the overall trend is to maintain the target payout.
- Managers and investors seem more ...
Purchase this Solution
Free BrainMass Quizzes
Six Sigma for Process Improvement
A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.
MS Word 2010-Tricky Features
These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.
Motivation
This tests some key elements of major motivation theories.
Business Processes
This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.
Marketing Research and Forecasting
The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.