How Is a Sustainable Dividend Growth Rate Defined

question 35

Multiple Choice

How is a sustainable dividend growth rate defined?

• A)a constant rate at which dividends increase
• B)a rate of growth that does not exceed two percent of the annual increase in revenue
• C)a rate of growth that is set equal to one-half of the average growth rate of a firm's earnings
• D)a rate that can be supported over time by a company's earnings
• E)a rate of dividend growth that is equal to the discount rate used to value the firm's stock

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Definitions:

Imprisonment

The state of being confined in prison as a punishment for crimes committed.

Monopoly Power

The ability of a single company or entity to control or dominate an industry or sector, reducing competition.

Market Share

The portion of a market controlled by a particular company or product.

Tying Arrangements

Business practices where the seller conditions the sale of one product (the "tying" product) on the buyer's agreement to purchase a second, distinct product (the "tied" product).