Question

Companies with a higher growth pattern are likely to:
a. pay lower dividends
b. pay higher dividends
c. dividends are not affected by growth considerations
d. none of the above

Answer 1

Answer:

Companies with a higher growth pattern are likely to : pay lower dividends  

 

Among the given options option (a)  pay lower dividends is the correct answer.

Explanation:

Companies having good growth opportunities retain more money out of their earnings so as to finance the required investment .Therefore the dividend declared in growth companies is smaller than that in the non growth companies.

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Here are more questions of the same chapter :  

Other things remaining the same, an increase in the tax rate on corporate profits will:  

a. make the debt relatively cheaper  

b. make the debt relatively the dearer  

c. have no impact on the cost of debt  

d. we can't say

https://brainly.in/question/9386842

 

A decision to acquire a new and modern plant to upgrade an old one is a:

a. financing decision  

b. working capital decision  

c. investment decision

d. None of the above  

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Answer 2

Answer:

Companies with higher growth rate are likely to pay lower rate of dividend. Companies with higher growth rate would prefer to plough back its profit for the growth of the company which would result in long term benefits rather than distributing dividends which is temporary.