Assume All Else Remains the Same

question 59

Multiple Choice

Assume all else remains the same. Which of the following statements is true?

• A) The lower the dividend payout, the less a firm will have to reinvest.
• B) The higher the dividend payout, the more discretionary financing a firm will require.
• C) The lower the dividend payout, the more discretionary financing a firm will require.
• D) The higher the dividend payout, the higher the retention percentage.

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Definitions:

Worker

An individual who performs tasks or services for compensation, contributing labor to an economy.

Nonlabor Resources

Inputs used in the production of goods and services that do not involve human labor, such as land, machinery, and materials.

Accounting Profits

The total revenue of a business minus the explicit costs; it is the net income reported on the financial statement.