Question 4 . Previous Next Which one of the following options is usually an appe

Question

Question 4 . Previous Next Which one of the following options is usually an appealing way to try to increase a company's ROE? Issuing additional shares of stock and using the proceeds to retire long-term debt and avoid short-term loans Paying a minimal dividend (probably no more than $0.10 per share), so as to keep boosting retained earnings by a sizable amount every year Pursuing actions to boost the company's total profits and maintaining a high (above 75%) dividend payout ratio Not paying a dividend and using all available cash to pay down debt Paying a dividend each upcoming decision round that exceeds projected EPS by $1.00 Copying, redistributing, or website posting is expressly prohibited and constitutes copyright violation. Copyright 2018 by Glo-Bus Software, Inc. Previous Next>

Explanation / Answer

Return on equity is Profit/Total equity

So increasing profits and reducing equity by distributing profits as dividend increases ROE

So correct answer is:

Pursuing actions to boost the company's total profits and maintaining a high (above 75%) dividend payout ratio

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.