Big Deal Corp., pays out a fixed percentage of its net income to its shareholders in the form of annual dividends.

Big Deal Corp., pays out a fixed percentage of its net income to

its shareholders in the form of annual dividends. Given this, the

percentage shown on a common-size income statement for the dividend

account will behave in which of the following ways?

a. remain constant over time.

b. be equal to the dividend amount divided by the net income.

c. vary in direct relation to the net profit percentage.

d. vary in direct relation to changes in the sales level.

e. vary but not in direct relation to any other variable.

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