Other things being equal,a low ________ would be most consistent with a relatively high growth rate of firm earnings and dividends.

Question

Quizplus · Accepted Answer

A low dividend payout ratio means that a company is retaining more of its earnings to reinvest into the business, which can lead to higher growth rates in earnings and dividends. This is because the retained earnings can be used to fund new projects, expand operations, or invest in research and development, all of which can contribute to future growth. A high dividend payout ratio, on the other hand, implies that a company is distributing a larger portion of its earnings to shareholders, leaving less available for reinvestment and growth.

Other Things Being Equal,a Low ________ Would Be Most Consistent