Question
In which situation would the shareholders of a company prefer the firm reinvest its earnings rather than distribute them as dividends? ROE > Ke, and
In which situation would the shareholders of a company prefer the firm reinvest its earnings rather than distribute them as dividends?
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| ROE > Ke, and investors believe they can earn Ke if they reinvested dividends in the market |
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| ROE < Ke, and investors believe they can earn Ke if they reinvested dividends in the market |
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| ROE = Ke, and investors believe they can earn Ke if they reinvested dividends in the market |
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| ROE > Ke, and investors believe they can earn more than ROE if they reinvest dividends in the market |
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Financial Management Theory And Practice
Authors: Prasanna Chandra
8th Edition
0071078401, 978-0071078405
