Which of the Following Statements Is FALSE Regarding Profitable and Unprofitable

question 1

Multiple Choice

Which of the following statements is FALSE regarding profitable and unprofitable growth?

• A) If a firm wants to increase its share price, it must diversify.
• B) If a firm retains more earnings, it will pay out less of those earnings, reducing its dividends.
• C) A firm can increase its growth rate by retaining more of its earnings.
• D) Cutting a firm's dividend to increase investment will raise the stock price if the new investment has a positive net present value (NPV).

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Definitions:

Nonexempt Property

Assets that can be seized and sold off by creditors or bankruptcy trustees because they are not protected under bankruptcy exemption laws.

Chapter 7 Bankruptcy

Chapter 7 Bankruptcy is a legal process that allows individuals or businesses to discharge most of their debts, liquidating assets to pay off creditors.

Bankruptcy Proceedings

The legal process through which individuals or businesses unable to meet their financial obligations seek relief from their debts.

Payment Plan

A payment plan is an agreement to pay off an owed amount over a designated period, through specified number of installments.