Firms’ Dividend Practices Assignment | Homework For You
May 21st, 2020
In general, firms’ dividend practices fit into the categories listed in the following table (constant payout ratio, low-regular-dividend-plus-extras, residual dividend policy, and stable, predictable dividend policies). Identify the category that each practice corresponds to in the table.
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Firms’ Dividend Practices Assignment | Homework For You
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| Practice | Constant Payout Ratio | Low-Regular-Dividend- Plus-Extras | Residual Dividend | Stable, Predictable Dividend | |
|---|---|---|---|---|---|
| ABCDE Telecom Inc. sets its dividend rather conservatively, but supplemental dividends are periodically issued when it finds itself with excess funds. | |||||
| The goal of Tobotics Inc.’s dividend policy is to reinvest earnings into the firm if the rate of return that the firm can earn on reinvested earnings exceeds the rate that investors, on average, can earn on other investments of comparable risk. If there are any funds remaining after this reinvestment, they are paid out in the form of dividends. | |||||
| Universal Drugmakers Inc.’s annual dividend has increased by 1% every year since 1966. | |||||
| Praxis Corp. has received a lot of negative feedback from its investors because it uses a dividend policy that pays a set percentage of its net income even though the company’s earnings fluctuate dramatically. The investors feel that this dividend policy creates too much uncertainty about the expected dividend each year. Get Finance homework help today |
