Which of the following statements is FALSE? A common approximation is to assume
ID: 2720839 • Letter: W
Question
Which of the following statements is FALSE?
A common approximation is to assume that in the long run, dividends will grow at a constant rate.
There is a tremendous amount of uncertainty associated with any forecast of a firms future dividends.
During periods of high growth, it is not unusual for firms to pay out 100% of their earnings to shareholders in the form of dividends.
The dividend each year is the firms earnings per share (EPS) multiplied by its dividend payout rate.
A)A common approximation is to assume that in the long run, dividends will grow at a constant rate.
B)There is a tremendous amount of uncertainty associated with any forecast of a firms future dividends.
C)During periods of high growth, it is not unusual for firms to pay out 100% of their earnings to shareholders in the form of dividends.
D)The dividend each year is the firms earnings per share (EPS) multiplied by its dividend payout rate.
Explanation / Answer
Option C. is False.
During periods of high growth, it is not unusual for firms to pay out 100% of their earnings to shareholders in the form of dividends is not true, because at the time of high profits, it is usual that the high dividends are paid out to the shareholders.
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.