Differential growth refers to a firm that increases its dividend by:
A) three or more percent per year.
B) a rate which is most likely not sustainable over an extended period of time.
C) a constant rate of two or more percent per year.
D) $.10 or more per year.
E) an amount in excess of $.10 a year.

Question

Quizplus · Accepted Answer

Differential growth refers to a rate of dividend increase that is higher than the sustainable rate. Option B states that the rate is most likely not sustainable over an extended period of time, which aligns with the concept of differential growth. The other options do not necessarily imply differential growth.

Differential Growth Refers to a Firm That Increases Its Dividend