When a firm chooses a constant long-term payout ratio its dividend policy, that ratio is known as its ________________________.

Question

When a firm chooses a constant long-term payout ratio its dividend policy, that ratio is known as its ________________________. ​

Quizplus · Accepted Answer

When a firm chooses a constant long-term payout ratio, it is known as its target payout ratio. This means that the firm aims to pay out a certain percentage of its earnings as dividends consistently over the long term. A stable dividend per share refers to a consistent dividend payout per share, while a regular dividend simply means paying dividends on a regular basis. A special payout policy refers to a one-time or irregular payout above and beyond the regular dividend payments. Therefore, the most appropriate answer is A.

When a Firm Chooses a Constant Long-Term Payout Ratio Its