Low-dividend-payout policy may require less need for additional costly outside financing for the firm.

Name: Low-dividend-payout policy may require less need for additional costly outside financing for the firm.
Brand: Quizplus
Rating: 4.8 (57 reviews)

Question

Quizplus · Accepted Answer

By retaining more earnings and paying out less as dividends, the firm can use those retained earnings to fund its growth and investment projects instead of seeking outside financing. This can lead to less need for costly financing like issuing new shares or borrowing from banks.

Low-Dividend-Payout Policy May Require Less Need for Additional Costly Outside