If a Company's Return on Equity Is Lower Than Its

question 1

True/False

If a company's return on equity is lower than its cost of equity capital, then the higher the dividend payout ratio the higher the P/E of the stock.

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Definitions:

Task Significance

A worker’s perception that the task directly affects other people’s work or lives.

Frustration-Regression Principle

A theory suggesting that when an individual is blocked from reaching a goal, they may regress to earlier behaviors to cope with the frustration.

ERG Theory

is a theory in psychology proposed by Clayton Alderfer that categorizes human needs into three groups: Existence, Relatedness, and Growth.

Herzberg's Two-Factor Theory

A theory that separates workplace factors into Motivation factors, which can improve employee satisfaction, and Hygiene factors, which can cause dissatisfaction if absent but not necessarily improve satisfaction if increased.