Two Otherwise Equal Companies Have Significantly Different Dividend Payout Ratios

question 60

Multiple Choice

Two otherwise equal companies have significantly different dividend payout ratios. Which of the following statements is most likely to be correct? The company with the higher dividend payout ratio:

• A)will have a higher inventory turnover ratio.
• B)will have a lower inventory turnover ratio.
• C)will have a higher earnings retention ratio.
• D)will have a lower earnings retention ratio.

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Definitions:

Means

The average that is derived by adding up all the values of a given series and dividing by the number of values.

Teaspoon

A small spoon typically used for measuring or stirring liquids, equivalent to about 5 milliliters in capacity.

Abbreviation

The shortened form of a word or phrase, used to simplify longer terms without losing their meaning.

Deci-

A metric prefix denoting a factor of one tenth.