Which of the following would increase a company's need for external finance,all else equal?
A) An increase in the dividend payout ratio
B) A decrease in sales growth
C) An increase in profit margin
D) A decrease in the collection period

Question

Quizplus · Accepted Answer

An increase in the dividend payout ratio would increase a company's need for external finance because it would be distributing a larger portion of its earnings to shareholders, leaving less internally generated funds available for investment or other purposes.

Which of the Following Would Increase a Company's Need for External