Dividend payout ratios:
A)Usually do not vary from year to year, on the contrary they tend to remain constant
B)During times of economic expansion and high profits they may be greater than 100% of profits.
C)During times of economic recession and low profits they may be greater than 100% of profits
D)Tend to be greater than 60% of profits.

Question

Quizplus · Accepted Answer

Dividend payout ratios can indeed be greater than 100% of profits during times of economic recession and low profits. This happens when a company decides to maintain its dividend payments to shareholders despite earning low profits, potentially borrowing money or using reserves to do so. This is often done to maintain investor confidence or adhere to a consistent dividend policy.

Dividend Payout Ratios