A policy of dividend "smoothing" refers to:

Question

Quizplus · Accepted Answer

A policy of dividend smoothing refers to a steady progression of dividend increases over time to avoid sudden changes in dividends. This helps to provide stability to the investors and signal the company's long-term stable earnings growth. Maintaining a constant dividend payout ratio or keeping the regular dividend at the same level indefinitely does not provide investors with the expected return or growth they are seeking, and alternating cash dividends with stock dividends is a different type of dividend policy.

A Policy of Dividend "Smoothing" Refers To