A ﬁrm can make it easier for an investor to create a homemade dividend policy if the ﬁrm:

Question

Quizplus · Accepted Answer

Offering an automated dividend reinvestment plan would make it easier for an investor to create a homemade dividend policy as it allows the investor to automatically reinvest their dividends into more shares of the company, increasing their overall ownership stake and potential dividend income. Both the residual dividend approach and pursuing a compromise dividend policy may provide some guidance or consistency in dividend payouts, but they do not necessarily make it easier for an investor to create a personalized dividend strategy. Paying a regular cash dividend and completing a stock split may be beneficial for other reasons, but they do not directly address the issue of creating a homemade dividend policy.

A ﬁRm Can Make It Easier for an Investor to Create