Other Things Being Equal, a Low ________ Would Be Most

question 2

Multiple Choice

Other things being equal, a low ________ would be most consistent with a relatively high growth rate of firm earnings and dividends.

• A)dividend payout ratio
• B)degree of financial leverage
• C)variability of earnings
• D)inflation rate

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Definitions:

Operating Cash Flow

Cash generated by a company’s core business operations.

Cash Flow

Cash Flow is the net amount of cash and cash-equivalents being transferred into and out of a business, affecting its liquidity.

Assets

Resources owned by a company, expected to deliver future economic benefits.

Capital Gains

Profit realized from the sale of assets like stocks, bonds, or real estate when the selling price exceeds the purchasing price.