The Retention of Earnings Instead of Paying Dividends

question 25

Multiple Choice

The retention of earnings instead of paying dividends

• A) may result in greater growth and higher stock prices
• B) ​is advantageous for all stockholders
• C) ​is favored by stockholders in lower income tax brackets
• D) ​leads to lower future dividends

---

Definitions:

Psychological Triad

Refers to the three components of psychological analysis: thoughts, feelings, and behaviors.

Pigeonholing

The practice of classifying or categorizing people, ideas, or objects narrowly and often unfairly, limiting potential or understanding.

Funder's First Law

A principle in psychology which suggests that important or extreme behavior in one situation tends to be important or extreme in other situations as well.

Psychoanalytic

Relating to or based on the theories of Sigmund Freud, focusing on unconscious motivations and conflicts as drivers of human behavior and psychological problems.