The level of dividends a firm expects to pay is generally unrelated to how rapidly it expects to grow as well as the level of asset investments required.

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The level of dividends a firm expects to pay is often related to how rapidly it expects to grow and the level of asset investments required. If a firm expects rapid growth and requires significant investment in assets, it may choose to pay lower dividends or no dividends at all in order to retain earnings for investment. On the other hand, a firm with lower growth expectations and less need for asset investments may choose to pay higher dividends to reward shareholders.

The Level of Dividends a Firm Expects to Pay Is