Dividend growth is a function of what?
A) Return on equity.
B) The retention rate.
C) The payout ratio.
D) All of the above.
E) None of the above.

Question

Quizplus · Accepted Answer

Dividend growth can be influenced by all of the factors listed, as they are all related to a company's ability to generate and distribute profits to shareholders. Return on equity reflects the effectiveness of a company's use of shareholder funds to generate profits, while the retention rate measures the percentage of profits that are reinvested in the company rather than paid out as dividends. The payout ratio reflects the percentage of profits that are distributed as dividends, with a lower ratio indicating greater potential for dividend growth.

Dividend Growth Is a Function of What