Question: Everything else equal, generally a firm will set a low dividend payout ratio and finance capital budgeting projects using retained earnings rather than through the

Everything else equal, generally a firm will set a low dividend payout ratio and finance capital budgeting projects using retained earnings rather than through the sale of new common stock when the _____.

a.

senior management team wants to dilute the firm's ownership

b.

firm's annual earnings increase

c.

firm faces no constraints with regard to the distribution of earnings

d.

firm has fewer acceptable capital budgeting projects than in previous years

e.

flotation costs associated with a stock issue are high

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