Here are several assertions about typical corporate dividend policies.
Which of them are true? Write out a corrected version of any false
statements.
a. Most companies set a target dividend payout ratio.
b. They set each year?s dividend equal to the target payout ratio
times that year?s earnings.
c. Managers and investors seem more concerned with dividend changes
than dividend levels.
d. Managers often increase dividends temporarily when earnings are
unexpectedly high for a year or two.

For each of the following four groups of companies, state whether you
would expect them to distribute a relatively high or low proportion of
current earnings and whether you would expect them to have a
relatively high or low price-earnings ratio.
a. High-risk companies.
b. Companies that have recently experienced a temporary decline in profits.
c. Companies that expect to experience a decline in profits.
d. ?Growth? companies with valuable future investment opportunities.