Final answer:
Relatively young firms should consider retaining earnings to reinvest in the firm.
Step-by-step explanation:
When considering a dividend policy, relatively young firms should focus on retaining earnings to reinvest in the firm. Issuing stock and paying out dividends may not be suitable for young firms as they often need to reinvest profits to fuel their growth and expand their operations. Borrowing funds to pay dividends or paying out all free cash flows may also not be viable options as they can put financial strain on the firm, especially if it has limited income.