Q
If Mark wanted to help Bob improve the company's ability to grow, how would you summarize the effect of the retention ratio vs. the dividend payout ratio on that goal?
(Points : 1)
(A) All else being equal, a higher retention ratio will help the company's ability to sustain growth through internal financing.
(B) All else being equal, a higher dividend payout ratio will help the company's ability to sustain growth through internal financing.
(C) All else being equal, a higher retention ratio will hurt the company's ability to sustain growth through internal financing.
(D) There is no relationship between these ratios and the firm's ability to grow.
(Points : 1)
(A) All else being equal, a higher retention ratio will help the company's ability to sustain growth through internal financing.
(B) All else being equal, a higher dividend payout ratio will help the company's ability to sustain growth through internal financing.
(C) All else being equal, a higher retention ratio will hurt the company's ability to sustain growth through internal financing.
(D) There is no relationship between these ratios and the firm's ability to grow.
A
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