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 insustainability?
A. Dividend payout ratio: 90%.
B. FCFE coverage ratio: 2.5.
C. Debt-equity-ratio: 30%.
Explanation: With such a high dividend payout ratio, a relatively small percentage decline in earnings could cause the dividend not to be payable out of earnings.

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