Top Posters
Since Sunday
17
6
5
5
s
5
t
5
s
5
9
5
g
5
h
5
l
5
o
5
Home Q & A Board Other Fields Homework Help Business Finance
New Topic  
johnpaech johnpaech
wrote...
Go to Answer
Posts: 1098
Rep: 7 0
5 years ago
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.
Textbook 
Corporate Finance: The Core

Corporate Finance: The Core


Edition: 4th
Authors:
Read 78 times
2 Replies
Replies
Answer verified by a subject expert
anicidanicid
wrote...
#1
Top Poster
Posts: 694
Rep: 32 0
5 years ago
Sign in or Sign up in seconds to unlock everything for free
More solutions for this book are available here
A
Explanation:  A) This will only increase the share price if the reinvested money is invested in positive NPV projects.
1

Related Topics

wrote...
#2
3 years ago
Thanks
New Topic      
Quick Reply
Explore
Post your homework questions and get free online help from our incredible volunteers
  295 People Browsing
 259 Signed Up Today
Start New Topic Take the Tour Study Tips Study ToolsNew Topics Trending Browse by Textbook
Related Images
  
 1023
  
 879
  
 2842
Your Opinion
Previous poll results: Which country would you like to visit for its food?