Which of the Following Statements Is FALSE Regarding Profitable and Unprofitable

question 50

Multiple Choice

Which of the following statements is FALSE regarding profitable and unprofitable growth?

• A) A firm can increase its growth rate by retaining more of its earnings.
• B) Cutting the firm's dividend to increase investment will raise the share price if, and only if, the new investments have a positive net present value (NPV).
• C) If the firm retains more earnings, it will be able to pay out less of those earnings, which means that the firm will have to reduce its dividend.
• D) If a firm wants to increase its share price, it must cut its dividend and invest more.

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Definitions:

Constructive Condition

Conditions inferred by law to enforce fairness in the performance of contractual obligations, even if not explicitly stated in the contract.

Breach Of Contract

A failure to perform any promise that forms all or part of a contract.

Condition Precedent

A condition that must be fulfilled before a contract becomes effective or before an obligation is required to be performed.

Injunction

A legal directive mandating that a person or organization either perform or halt a particular act.