In response to a temporary decline in earnings per share (EPS), most companies would [blank].
A)decrease their cash dividend
B)not decrease their cash dividend
C)suspend their cash dividend
D)substitute a share dividend for the cash dividend

Question

Quizplus · Accepted Answer

Most companies would not decrease their cash dividend in response to a temporary decline in EPS. This is because dividends are often viewed as a way to maintain shareholder loyalty and support, and decreasing or suspending dividends can lead to negative reactions from investors. Instead, companies may focus on improving their financial performance and increasing EPS in the long term.

In Response to a Temporary Decline in Earnings Per Share