Which of the Following Statements Is FALSE Regarding Profitable and Unprofitable

Multiple Choice

Which of the following statements is FALSE regarding profitable and unprofitable growth?

A) If a firm wants to increase its share price, it must diversify.
B) If a firm retains more earnings, it will pay out less of those earnings, reducing its dividends.
C) A firm can increase its growth rate by retaining more of its earnings.
D) Cutting a firm's dividend to increase investment will raise the stock price if the new investment has a positive net present value (NPV) .