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6 July, 10:03

Define what is a constant dividend payout ratio policy

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  1. 6 July, 11:57
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    means payment of a fixed percentage of net earnings as dividends every year.

    Explanation: The amount of dividend in such a policy fluctuates in direct proportion to the earnings of the company. The policy of constant pay-out is preferred by the firms because it is related to their ability to pay dividends.
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