Given constant earnings per share, an increase in dividends will generally:

Question

Quizplus · Accepted Answer

An increase in dividends, assuming constant earnings per share, typically means that a larger portion of the company's earnings is being paid out to shareholders rather than being reinvested in the company. This can lead to a decrease in the growth rate of the corporation since less money is being reinvested for future growth. It also increases the current yield (dividend yield) because the dividend payout is higher relative to the stock price.

Given Constant Earnings Per Share, an Increase in Dividends Will