If a Firm Pays Out 30% of Its Earnings as Dividends

question 55

Multiple Choice

If a firm pays out 30% of its earnings as dividends and has averaged a 20 percent return on assets, how quickly can the firm grow without needing to secure outside funding sources?

• A)6.4%.
• B)10.2%.
• C)14.3%.
• D)20.0%.
• E)none of the above.
• Too many clones

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Definitions:

Positive Selection

The evolutionary process by which alleles that confer a fitness advantage increase in frequency within a population, leading to adaptation.

Purifying Selection

A type of natural selection that removes deleterious alleles from a population, leading to a decrease in genetic variation for the traits affected.

Neutral Theory

A theory in molecular evolution that proposes most genetic variations are the result of genetic drift and not selective forces, and that at the molecular level, the majority of mutations are neutral.

Molecular Evolution

The process of evolution at the scale of DNA, RNA, and proteins, encompassing changes in molecular structure and sequence over time.