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Question
Higher dividend per share is associated with
Options
high earnings, high cash flows, unstable earnings and higher growth opportunities
high earnings, high cash flows, stable earnings and high growth opportunities
high earnings, high cash flows, stable earnings and lower growth opportunities
high earnings, low cash flows, stable earnings and lower growth opportunities
Solution
high earnings, low cash flows, stable earnings and lower growth opportunities
Explanation -
If a company pays a bigger dividend per share, it is related with better profitability because they can only earn more if they earn more will be able to pay bigger dividends and cash outflows since dividend payments are made with cash outflow; consistent earnings as consistent earnings indicates the corporation is optimistic about its future profits potentials; and fewer prospects for growth because it necessitates fewer retained assets profits and earnings retained while lowering the dividend payment amount.
