Which of the Following Is Incorrect for a Firm with a Payout

question 95

Multiple Choice

Which of the following is incorrect for a firm with a payout ratio of 0.15 and ROE of 20 percent:

• A)It reinvests 85 percent of its earnings back into the firm
• B)The firm's retained earnings will increase the book value of equity by 17 percent
• C)It pays a dividend of 15 cents per share
• D)The firm's earnings and equity will grow by 17 percent per year

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Definitions:

Grandparents

The parents of one's parents, who play varying roles in family structures from caregivers to sources of wisdom.

Nuclear Families

A family unit that includes only parents and their children, regarded as a basic social unit.

Two-Parent Homes

Households in which children are raised by both biological or adoptive parents, often associated with positive developmental outcomes for children.

Single-Parent Homes

Households in which one parent is responsible for raising one or more children.