Companies with residual dividend policies priorities paying capital expenditures out of earnings.
<h3>What is payout ratio?</h3>
The payout ratio, which is calculated as a percentage of the firm's total earnings, demonstrates the part of earnings that a company distributes to its shareholders in the form of dividends. By dividing the total dividends given out by the net income made, the computation is arrived at.
For dividend investors, the dividend payout ratio is a crucial indicator. It demonstrates how much of a company's earnings are distributed to investors. The higher that number, the less cash a corporation has left over to fund dividend growth and corporate expansion.
Companies with residual dividend policies priorities paying capital expenditures out of earnings. Any unused revenues are then used to pay dividends. Long-term debt and equity are often both parts of a company's capital structure.
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Answer: Capital market instruments include both long-term debt and common stocks.
Explanation:
Asking the options given, the option that is correct is that Capital market instruments include both long-term debt and common stocks.
The capital market refers to s financial market whereby equity backed securities and long-term debt can be purchased and sold. The capital different is different from the money market which ideally deals with short-term debt.
In the capital market, the buyers and the sellers engage in financial securities such as stocks, bonds, stocks, etc.
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The flexible strategy is used to avoid the delay in assessing the external constraints.
The following information regarding accessing external constraints:
- It could be thrust upon an organization.
- It permits for uncovering the things that are beyond the control.
- The example involved national holidays or sick leaves.
If we accessing the external constraints so the delay could be avoided.
So, The other options seem incorrect
Therefore we can conclude that the flexible strategy is used to avoid the delay in assessing the external constraints.
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