A Firm Might Have a Low Dividend Payout Ratio If

question 40

True/False

A firm might have a low dividend payout ratio if it were planning a major expansion.

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Definitions:

Yield To Maturity

The total return expected on a bond if held until it matures, including all interest and principal repayments.

Semiannually

Occurring twice a year or every six months.

Present Value

The current assessment of a future cash sum or cash flow streams, discounted at a defined rate of return.

Coupon

The interest payment made to bondholders, typically expressed as an annual percentage of the bond's face value.