Which one of the following statements is correct?
A) A reduction in personal tax rates tends to lead to lower dividends.
B) Dividends tend to fluctuate significantly from quarter to quarter.
C) Earnings growth tends to lag dividend growth.
D) Dividend payments are highly concentrated in a relatively small set of large companies.
E) Non-dividend-paying companies are generally more apt to commence paying regular dividends than to implement a stock repurchase program.

Question

Quizplus · Accepted Answer

According to various studies, dividend payments tend to be highly concentrated in a relatively small set of large companies. This means that a majority of dividend payments are made by a handful of big companies, and the rest of the companies either pay lower dividends or do not pay dividends at all.

Which One of the Following Statements Is Correct