Donovan's Would Like to Increase Its Internal Rate of Growth

question 86

Multiple Choice

Donovan's would like to increase its internal rate of growth.Decreasing which one of the following will help the firm achieve its goal?

• A)Return on assets
• B)Net income
• C)Retention ratio
• D)Dividend payout ratio
• E)Return on equity

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Definitions:

Dividend Policy

Dividend policy is the set of guidelines a company follows in deciding how much of its profit will be distributed to shareholders as dividends and how much will be reinvested in the business.

New Equity

New equity refers to funds raised by a company through the issuance of additional shares of stock.

Compromise Policy

A strategy aimed at finding a middle ground among different stakeholders' interests or policy alternatives.

Dividend Policy

A company's strategy or set of guidelines for distributing earnings to shareholders in the form of dividends.