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

Question

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A firm's dividend policy is closely tied to its investment policy and borrowing. Changes in these factors can impact a firm's cash flows, which in turn can require changes to its dividend policy. Therefore, unless investment policy and borrowing remain constant, a firm's overall cash flows will change, potentially impacting its ability to pay dividends.

In Regard to Dividend Policy,unless a Firm's Investment Policy and Borrowing