You are a retired worker whose income is derived from your company pension plan and social security.However,you are highly dependent upon the income generated from your 401(k)plan,which is heavily weighted in stocks that pay substantial dividends.Which of the following dividend policies would you prefer?
A) Constant dividend payment ratio
B) Stable dollar dividend per share
C) Small, regular dividend plus a year-end extra
D) Any of the above would be equally desirable

Question

Quizplus · Accepted Answer

As a retired worker relying heavily on dividends from stocks in the 401(k) plan, a stable dollar dividend per share would be the most preferable dividend policy. This policy ensures a consistent and reliable source of income, which is important for retirees who rely on this income to fund their living expenses. A constant dividend payment ratio or a small, regular dividend plus a year-end extra may not provide the same level of stability and reliability in income.

You Are a Retired Worker Whose Income Is Derived from Your