Which of the following statements is FALSE regarding profitable and unprofitable growth?
A) If a firm wants to increase its share price, it must diversify.
B) If a firm retains more earnings, it will pay out less of those earnings, reducing its dividends.
C) A firm can increase its growth rate by retaining more of its earnings.
D) Cutting a firm's dividend to increase investment will raise the stock price if the new investment has a positive net present value (NPV).
Answer: A
Business
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