In practice, determinants of dividend policy include, in order of importance
A) lack of good investment opportunities, influence of large institutional investors, maintaining a stable debt to assets ratio
B) maintaining a constant dividend payout ratio, attracting retail investors, maintaining a consistent growth rate for dividends
C) consistency with historical dividend policies, sustainable changes in earnings, tax burden on shareholders.
D) wishes of large institutional investors, excess cash after investment needs are met, avoiding flotation costs for issuing new equity.

Question

Quizplus · Accepted Answer

Consistency with historical dividend policies and sustainable changes in earnings are key determinants of dividend policy, as they ensure stability and reliability for investors. Additionally, the tax burden on shareholders can influence dividend decisions, as companies may adjust policies to optimize shareholder returns.

In Practice, Determinants of Dividend Policy Include, in Order of Importance