Answer: A profitable company with only a few positive NPV projects

## Explanation **A profitable company with only a few positive NPV projects** is the most appropriate candidate for a dividend increase because: - The company generates profits but has limited investment opportunities - Returning excess cash to shareholders through dividends reduces agency costs - This aligns with the **mature company profile** in the corporate life cycle **Other options:** - **Fast-growing tech company** should retain earnings to fund growth opportunities - **Company with volatile earnings** should maintain conservative dividend policy to avoid future cuts This follows the **residual dividend policy** where dividends are paid from earnings not needed for investments.

Author: LeetQuiz .