[amp_mcq option1=”Only 1″ option2=”Only 2″ option3=”Both 1 and 2″ option4=”Neither 1 nor 2″ correct=”option3″]<\/p>\n
The correct answer is C. Both 1 and 2.<\/p>\n
A dividend policy is a decision made by a company’s board of directors regarding how much of the company’s earnings should be distributed to shareholders as dividends. The two main factors that a company considers when setting its dividend policy are dividend payout and stability of dividend.<\/p>\n
Dividend payout is the percentage of a company’s earnings that is paid out as dividends. A high dividend payout ratio indicates that a company is returning a lot of money to its shareholders, while a low dividend payout ratio indicates that a company is reinvesting more of its earnings back into the business.<\/p>\n
Stability of dividend is the consistency with which a company pays dividends. A company with a stable dividend policy is more likely to continue paying dividends even during tough economic times, while a company with an unstable dividend policy may cut or eliminate dividends if its earnings decline.<\/p>\n
Both dividend payout and stability of dividend are important factors to consider when evaluating a company’s dividend policy. A company with a high dividend payout ratio and a stable dividend policy is likely to be a good investment for income-oriented investors.<\/p>\n","protected":false},"excerpt":{"rendered":"
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