Final answer:
Dividend payments are generally fairly stable from one time period to another, as companies strive for predictability to please investors. They are part of the profits that are distributed to shareholders, and stable companies tend to provide consistent dividends.
Step-by-step explanation:
Even if a company does not officially follow a fixed-dividend policy, dividend payments are generally C) fairly stable from one time period to another. Companies often aim to maintain consistent dividend payments to attract and retain investors, who value predictability in their investment returns. Stable companies such as Coca-Cola and electric companies offer dividends on their stocks, and people hold these stocks for long periods expecting stable or slowly growing dividends. Although there may be variations due to business cycles and unexpected circumstances, firms typically try to avoid large fluctuations in their dividend payments. Dividends are a direct payment from a firm to its shareholders, and they are not directly tied to the company's P/E ratio, but rather are based on the percent of the profits a company decides to distribute. It's important to note that while stock prices are influenced by expectations about the company's future, dividends are derived from the actual profits made by the company in a given fiscal period.