Which of the Following Statements Is FALSE Regarding Profitable and Unprofitable

question 58

Multiple Choice

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

• A)A firm can increase its growth rate by retaining more of its earnings.
• B)If a firm wants to increase its share price, it must cut its dividend and invest more.
• C)If the firm retains more earnings, it will be able to pay out less of those earnings, which means that the firm will have to reduce its dividend.
• D)Cutting the firm's dividend to increase investment will raise the share price if, and only if, the new investments have a positive net present value (NPV).