Question

Which of the following statements is​ FALSE? A. There is a tremendous amount of uncertainty associated with any forecast of a​ firm's future dividends. B. The dividend each year is the​ firm's earnings per share​ (EPS) multiplied by its dividend payout rate. C. A common approximation is to assume that in the long​ run, dividends will grow at a constant rate. D. During periods of high​ growth, it is not unusual for firms to pay out​ 100% of their earnings to shareholders in the form of dividends.

Answer 1

D

Step-by-step explanation:

A dividend is a share of profits and retained earnings that shareholders receive from a company. After profits has been made by a firm and retained earnings accumulated, these earnings can be put back into the business as reinvestments or paid out as dividends to shareholders.

Dividends payment of 35% to 55% is said to be healthy and right. If A firm can distribute close to half of its earnings as dividends, this means that the firm is well established.

Answer 2

D. During periods of high​ growth, it is not unusual for firms to pay out​ 100% of their earnings to shareholders in the form of dividends.

Step-by-step explanation:

In economics, the above is false under dividends payout and growth.