When a firm enters Stage III of its life cycle, all of the following are likely to be observed except which?

Question

Quizplus · Accepted Answer

In Stage III, a firm typically experiences a rapid growth in sales and profits, and dividend payout ratios are likely to increase. However, sales do not begin to decrease in this stage. Instead, growth rates may slow down compared to Stage II. The other options, B and D, are likely to be observed in Stage III as competition increases and the firm's stock price rises, leading to the need for stock splits.

When a Firm Enters Stage III of Its Life Cycle