Which Statement Is Correct Regarding US Companies

Which statement is correct regarding US companies?

A) The personal taxes of investors is the key factor managers consider when establishing a dividend policy.
B) Firms tend to increase their regular dividend as soon as they expect increased earnings in the future.
C) Firms tend to react quickly to lower dividends any time the economy begins to slow.
D) Firms tend to quickly adjust their dividends to changes in the firm's P/E ratio.
E) Procter & Gamble is one example of a firm with a long history of increasing dividends.

Correct Answer:

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