Which of the Following Is Not Necessarily True for a Firm

question 89

Multiple Choice

Which of the following is not necessarily true for a firm with a payout ratio of .15 and ROE of 20%?

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

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Definitions:

Intermediaries

Businesses or individuals that act as a link between the producer of goods and services and the consumer or buyer.

Digital Marketing Channels

Online platforms and mediums used by businesses to promote their products and services to consumers, including social media, email, search engines, and websites.

Organizational Buyers

These are entities such as businesses, governments, and institutions that purchase goods and services for use in their own operations, for resale, or for manufacturing other products.

Electronic Exchange

A digital marketplace where buyers and sellers trade goods, services, or securities via electronic systems.