The Growth Rate in Dividends Is a Function of Two

question 40

Multiple Choice

The growth rate in dividends is a function of two ratios. They are:

• A) ROA and ROE.
• B) Dividend yield and growth rate in dividends.
• C) ROE and the Retention Ratio.
• D) Book value per share and EPS.

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Definitions:

Total Variable Cost

The total of all costs that vary with the level of output, including costs such as materials and labor.

Average Variable Cost

The variable cost per unit of output, calculated by dividing total variable costs by the quantity of output produced.

Marginal Cost Curve

A visual chart demonstrating the change in cost for manufacturing an additional unit of a product as production levels rise.

Average Variable Cost Curve

A graphical representation that shows the relationship between a firm's average variable costs and its quantity of output.