A low-risk profitable firm intends to maintain its 60% dividend payout ratio in the future. It doesn't forecast any buybacks or equity raisings and is expected toalways remain profitable.Over time, this firm's 'retained profits' on the balance sheet would be expected to:Select one:O a. Grow.O b. Remain unchanged.O C. Shrink.O d. Insufficient information.

Dividend Payout ratio is the percentage of earnings paid to shareholders via dividends.The amount…

A low-risk profitable firm intends to maintain its 60% dividend payout ratio in the future. It doesn't forecast any buybacks or equity raisings and is expected to lways remain profitable. Over time, this firm's 'retained profits' on the balance sheet would be expected to: Select one: O a. Grow. O b. Remain unchanged. 0 с. Shrink. O d. Insufficient information.

A low-risk profitable firm intends to maintain its 60% dividend payout ratio in the future. It doesn't forecast any buybacks or equity raisings and is expected to lways remain profitable. Over time, this firm's 'retained profits' on the balance sheet would be expected to: Select one: O a. Grow. O b. Remain unchanged. 0 с. Shrink. O d. Insufficient information.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter9: Corporate Valuation And Financial Planning

Section: Chapter Questions

Problem 6Q

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Question

A low-risk profitable firm intends to maintain its 60% dividend payout ratio in the future. It doesn't forecast any buybacks or equity raisings and is expected to
always remain profitable.
Over time, this firm's 'retained profits' on the balance sheet would be expected to:
Select one:
O a. Grow.
O b. Remain unchanged.
O C. Shrink.
O d. Insufficient information.

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