Theproblemwithaconstantpayoutratiodividendpolicyfromtheshareholdersperspectiveisthat
A. itborestheshareholders.
B. ifthefirmsearningsdrop,sodoesthedividendpayment.
C. evenwhenearningsarelow,thecompanymustpayafixeddividend.
D. thereisnoinformationalcontent.
Answer:B
Theproblemwithaconstantpayoutratiodividendpolicyfromtheshareholdersperspectiveisthat
A. itborestheshareholders. B. ifthefirmsearningsdrop,sodoesthedividendpayment. C. evenwhenearningsarelow,thecompanymustpayafixeddividend. D. thereisnoinformationalcontent.