Asked by Elizabeth Offer on Apr 25, 2024
Verified
The desire to maintain constant dividends over time tends to keep dividends low.
Constant Dividends
Dividend payments that are expected to remain at a fixed rate over time regardless of changes in the company's earnings or profitability.
- Grasp the understanding and significance of a compromise dividend policy.
- Recognize the reasons firms might have for adjusting their dividend policies.
Verified Answer
AP
Angela Padilla Vidarte6 days ago
Final Answer :
True
Explanation :
Companies that aim to maintain constant dividends over time often set their dividend payments at a sustainable level that can be supported even in less profitable years, which tends to keep dividends relatively low compared to a policy that might aim to distribute more aggressively during profitable periods.
Learning Objectives
- Grasp the understanding and significance of a compromise dividend policy.
- Recognize the reasons firms might have for adjusting their dividend policies.