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If a Firm Does Not Pay Dividends, What Is True

Question 54

Multiple Choice

If a firm does not pay dividends, what is true about the components of the sustainable growth rate?


A) The dividend payout ratio is 100%.
B) The retention ratio is 100%.
C) ROE does not equal the sustainable growth rate.
D) ROS is higher than if the firm did pay some dividends.

Correct Answer:

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