A dividend policy where the company pays out a fixed percentage of their earnings is called a

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A constant payout ratio policy is a dividend policy where the company pays out a fixed percentage of their earnings. This policy allows for the company to adjust their dividend payments as their earnings fluctuate, keeping the percentage constant. A constant nominal payout policy (A) is a dividend policy where the company pays out a fixed dollar amount per share, regardless of their earnings. A target dividend payout ratio policy (B) is a policy where the company sets a target payout ratio, but may adjust the actual dividend payment each period based on their earnings. A low-regular and extra policy (D) is a policy where the company pays a low, regular dividend, but also has the flexibility to pay out additional dividends if earnings allow.

A Dividend Policy Where the Company Pays Out a Fixed