CFA Practice Question

There are 131 practice questions for this study session.

CFA Practice Question

The most common dividend policy is the:

A. stable dividend policy.
B. constant dividend payout ratio policy.
C. residual dividend policy.
Correct Answer: A

Using a stable dividend policy, a company tries to align its dividend growth rate to the company's long-term earnings growth rate. Dividends may increase even in years when earnings decline, and dividends may increase at a lower rate than earnings in boom years.

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