In regards to dividend policy, unless a firm's investment policy and borrowing remain constant:

Question

Quizplus · Accepted Answer

If a firm's investment policy and borrowing levels change, it will impact the overall cash flows of the company. This, in turn, can affect the firm's ability to pay dividends or the level of dividend payout. Therefore, unless investment and borrowing policies remain constant, a firm's dividend policy may need to be adjusted accordingly.  There is no mention of shareholder risk in the question, so choices C and D can be eliminated.

In Regards to Dividend Policy, Unless a Firm's Investment Policy