Question
You notice that a firm with a relatively high stock price is profitable and growing quickly. What does a zero-dividend yield most likely indicate about
You notice that a firm with a relatively high stock price is profitable and growing quickly. What does a zero-dividend yield most likely indicate about the firm?
A. The firm is bankrupt. It's time for the firm to liquidate assets. B. The firm currently isn't paying any dividends. The firm is likely plowing back earnings, and will likely continue to do so, until growth slows. C. The firm is doing well, but the stock price is too high. D. The firm currently isn't paying dividends and will never pay dividends. This indicates a principal-agent problem.
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