Generally,a firm that maintains a low level of retained earnings will do which of the following?
A)maximize its share price in the long run
B)minimize its share price in the long run
C)maximize its market risk in the long run
D)minimize its market risk in the long run

Question

Quizplus · Accepted Answer

A firm that maintains a low level of retained earnings will generally maximize its share price in the long run. This is because a low level of retained earnings means that the firm is paying out more of its profits to shareholders in the form of dividends. This can lead to a higher share price in the long run, as investors are more likely to invest in a firm that is paying out a high dividend.

Generally,a Firm That Maintains a Low Level of Retained Earnings