A general rule of thumb would be that firms with a faster growth rate have smaller dividend payout ratios.

Question

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Firms with faster growth rates tend to reinvest more of their profits back into the company in order to fuel future growth, whereas firms with slower growth rates may have more money available to distribute to shareholders in the form of dividends. Therefore, firms with faster growth rates often have smaller dividend payout ratios.

A General Rule of Thumb Would Be That Firms with a Faster