Lintner's Model captures:
ARandom dividend policy
BStickiness — firms partially adjust toward target payout
CZero-payout strategy
DConstant ROI assumption
Answer & Solution
Correct answer: B. Stickiness — firms partially adjust toward target payout
1. Lintner's Model: firms have a target payout ratio.
2. Dividends adjust partially toward the target over time.
3. Captures empirical "dividend stickiness".
_Source: ICAI BoS CA Inter Paper 6A, Ch 8 "Dividend Decisions", §1 — Lintner_