The greater a firm's dividend payout,the ________ likely it is that the share's price will rise above the exercise price.

Question

Quizplus · Accepted Answer

The greater the firm's dividend payout, the less likely it is that the share's price will rise above the exercise price. This is because a high dividend payout reduces retained earnings, which in turn can reduce potential for future growth and capital appreciation of the company.

The Greater a Firm's Dividend Payout,the ________ Likely It Is