A Reason Why Management May Have a Long-Term Dividend Payout

A reason why management may have a long-term dividend payout ratio is that:

A) investors have a long-term investment horizon.
B) the present value of taxes paid on future dividend income is less than the present value of taxes paid on current dividend income.
C) management views dividends as a function of sustainable profits.
D) it assists management in long-term planning.

Correct Answer:

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