CFA Practice Question

There are 151 practice questions for this study session.

CFA Practice Question

Which is the most likely a warning sign of dividend sustainability?

A. Dividend coverage ratio: 2.5.
B. FCFE coverage ratio: 1.0.
C. Debt-equity-ratio: 20%.
Correct Answer: B

This indicates that the company is returning all available cash to shareholders. The practice is not sustainable.

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