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:

Negative Mood

Affective states that are unpleasant or undesirable, such as sadness, anger, or frustration.

Process Information

The act of gathering, interpreting, and using information relevant to a particular context or decision-making process.

Expected Meanings

Anticipated or presumed interpretations attached to messages, symbols, or actions.

Existential Perspective

A view that focuses on the cognitive, affective, and behavioral consequences of basic aspects of the human condition such as the knowledge of mortality, the desire for meaning, and the precarious nature of identity.