Dividend policy is a trade-off between ___________ and ___________.
A) retained earnings; borrowing
B) capital budgeting; capital structure
C) retained earnings; issuing stock
D) declaring stock splits; stock dividends

Question

Quizplus · Accepted Answer

Dividend policy involves deciding how much of a company's earnings to retain and how much to distribute as dividends. The trade-off is between using retained earnings to finance future growth (through capital expenditures or acquisitions) or distributing them to shareholders as dividends. Issuing stock (option C) is not typically considered as part of dividend policy, and neither are stock splits or stock dividends (option D). Capital budgeting and capital structure (option B) are related to dividend policy, but they are not the primary factors that determine dividend payouts.

Dividend Policy Is a Trade-Off Between ___________ and ___________

Dividend Policy Is a Trade-Off Between _ and _