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Basic Question 3 of 13

A firm follows a constant dividend payout ratio policy. If their earnings increase by 25 percent, their dividends will increase by ______ percent.

A. 0
B. 25
C. 50
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User Contributed Comments 2

User Comment
haarlemmer In reality, management tends to act in a fashion different than this. More conservative manner will be taken.
SueLiu Generally not a constant div. payout policy but a stable div policy.
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I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes

Barnes

Learning Outcome Statements

compare stable dividend with constant dividend payout ratio, and calculate the dividend under each policy;

describe broad trends in corporate payout policies;

CFA® 2025 Level II Curriculum, Volume 3, Module 16.