Which of the following statements accurately describes the relationship between earnings and dividends when all other factors are held constant?
All else being equal, growth in dividends requires growth in earnings.
Retaining a higher percentage of earnings will result in a lower growth rate.
Long-run earnings growth will decrease when firms retain earnings and reinvest them in the business.
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Home » Business » Which of the following statements accurately describes the relationship between earnings and dividends when all other factors are held constant? All else being equal, growth in dividends requires growth in earnings.