Biology Forums - Study Force

Which of the following statements is false regarding profitable and unprofitable growth?
A) If a firm wants to increase its share price, it must cut its dividend and invest more.
B) 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.
C) A firm can increase its growth rate by retaining more of its earnings.
D) Cutting the firm's dividend to increase investment will raise the stock price if, and only if, the new investments have a positive NPV.

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