Based on the Sustainable Growth Model,a Decrease in the Dividend

question 1

True/False

Based on the sustainable growth model,a decrease in the dividend payout ratio (1 - the retention ratio)will increase the growth in earnings per share in the future.

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Definitions:

Put Option

A financial contract giving the holder the right, but not the obligation, to sell a specific amount of an underlying asset at a set price within a specified time.

Stock Split

An action by a company to divide its existing stock into multiple shares to boost the liquidity of the shares, although the overall value of the shares remains the same.

Dow Jones

Dow Jones refers to the Dow Jones Industrial Average, a stock market index that measures the stock performance of 30 large companies listed on stock exchanges in the United States.

Adjustment

A modification made to accounts, financial statements, or records to ensure their accuracy and compliance with financial reporting standards.