Which of the following situations would increase the likelihood a firm pays dividends?

Question

Quizplus · Accepted Answer

Operating in a regulated industry often means that the company has limited flexibility in reinvesting profits and may have restrictions on how it can use its cash. Therefore, paying dividends becomes a more attractive and feasible option for returning value to shareholders. Rapid growth and high capital investment requirements may require the company to retain earnings for reinvestment instead of paying dividends. High earnings variability may indicate an unstable financial position, making it less likely for the company to pay dividends.

Which of the Following Situations Would Increase the Likelihood a Firm