An increase in which of the following variables is likely to lead to an increase in a firm's dividend payout?

Question

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Free cash flow generated refers to the cash left over after a firm has made all investments needed to maintain its assets, so an increase in free cash flow is likely to lead to an increase in dividend payout. Positive-NPV investment opportunities refer to opportunities for a firm to earn a higher return than its cost of capital, so such investments may lead to lower dividend payouts if the firm chooses to invest the cash instead. Personal tax rates on dividend income may affect the attractiveness of dividends to investors, but do not directly impact a firm's decision to increase its dividend payout. Asset growth rate refers to the rate at which a firm's assets are expanding, which could indicate potential future investment opportunities, but does not directly relate to a decision to increase dividend payout.

An Increase in Which of the Following Variables Is Likely