Holding risk constant, an increase in dividend yield will tend to decrease a firm's rate of growth.

Name: Holding risk constant, an increase in dividend yield will tend to decrease a firm's rate of growth.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

A higher dividend yield means the firm is paying out more of its earnings to shareholders, which leaves less money for the firm to invest in growth opportunities. This can lead to a decrease in the firm's rate of growth.

Holding Risk Constant, an Increase in Dividend Yield Will Tend