A Firm Increases Its Dividend Plowback Ratio

question 63

Multiple Choice

A firm increases its dividend plowback ratio. All else equal, you know that ________.

• A) earnings growth will increase and the stock's P/E will increase
• B) earnings growth will decrease and the stock's P/E will increase
• C) earnings growth will increase and the stock's P/E will decrease
• D) earnings growth will increase and the stock's P/E may or may not increase

---

Definitions:

Long-term Memory

A type of memory responsible for the storage of information over extended periods, anything from hours to a lifetime.

Sensory

Relating to sensation or the physical senses; transmitted or perceived by the senses.

Phonological

Pertaining to the system of sounds in a language and the rules for their combination and use.

Semantic Networks

A model for understanding human memory in which concepts are linked together based on their meanings and relationships.