"Holding other factors constant, a lower dividend payout ratio raises the growth rate. But the higher...

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"Holding other factors constant, a lower dividend payout ratio raises the growth rate. But the higher...

"Holding other factors constant, a lower dividend payout ratio raises the growth rate. But the higher growth rate does not necessarily increase the stock value." True or false? Select one: a. False b. True

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Answer 1

Answer #1

Answer is True.

A lower dividend payout ratio raises the growth rate because more funds are reinvested in the company and higher growth rate doesn't necessarily increase the stock value.

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Answer 2

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