Which of the following statements is FALSE about dividend payout and growth?
A) A common approximation is to assume that in the long run, dividends will grow at a constant rate.
B) The dividend each year is the firm's earnings per share (EPS) multiplied by its dividend payout rate.
C) There is a tremendous amount of uncertainty associated with any forecast of a firm's future dividends.
D) During periods of high growth, it is not unusual for firms to pay out 100% of their earnings to shareholders in the form of dividends.

Question

Quizplus · Accepted Answer

D) During periods of high growth, it is not unusual for these firms to retain 100% of their earnings to exploit profitable investment opportunities.

Which of the Following Statements Is FALSE About Dividend Payout