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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NEED ASAP. THANK YOU!! 1. Which of the following statements is correct? Group of answer choices - Higher sales usually require higher asset levels, and this leads to what we call AFN. However, the AFN will be zero if the firm chooses to retain all of its profits, i.e., to have a zero dividend payout ratio. - If a firm’s assets are growing at a positive rate, but its retained earnings are not increasing, then it would be impossible for the firm’s AFN to be negative. - Dividend policy does not affect the requirement for external funds based on the AFN equation. - AFN is not always positive. - If a firm increases its dividend payout ratio in anticipation of higher earnings, but sales and earnings actually decrease, then the firm’s actual AFN must, mathematically, exceed the previously calculated AFN.2. When we use the AFN equation to forecast the additional funds needed (AFN), we are implicitly assuming that all financial ratios are constant. Group of answer choices - True…