Relative to its assets,a firm with a large volume of retained earnings and a high ROE:

Question

Quizplus · Accepted Answer

A firm with a large volume of retained earnings and a high ROE already has access to internal funds to fuel growth, so it does not necessarily need to raise additional capital. Therefore, it can generate a higher growth rate without diluting ownership through stock issuances or taking on debt. Increasing the payout ratio would reduce the amount of retained earnings available for reinvestment, and it is not necessarily the best course of action for a company with high potential for growth.

Relative to Its Assets,a Firm with a Large Volume of Retained