Which of the Following Will Increase the Sustainable Equity Growth

question 13

Multiple Choice

Which of the following will increase the sustainable equity growth of a company, all other things equal?

• A)Increase dividend payout
• B)Pay suppliers more quickly
• C)Pay suppliers more slowly
• D)Decrease dividend payout

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Definitions:

Preferred Stock

A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock, often with dividends that are paid out before those to common shareholders.

Bonds Outstanding

The total amount of issued bonds that are currently held by investors and not yet redeemed.

Cost of Equity

The return that investors expect for investing in a company's equity, reflecting the compensation for the risk of investing.

Tax Rate

The percentage at which an individual or corporation is taxed by the government on their income or profit.