Donovan Brothers,Inc.would like to increase its internal rate of growth.Decreasing which one of the following will help the firm achieve its goal?
A)return on assets
B)net income
C)retention ratio
D)dividend payout ratio
E)return on equity

Question

Quizplus · Accepted Answer

The dividend payout ratio is the percentage of earnings that the company pays out as dividends to shareholders. If the company decreases this ratio, it will retain more earnings and can reinvest them in the business, which can lead to an increase in the internal rate of growth.