In the context of dividend policy, what would be a rational firm's retention ratio?

Question

In the context of dividend policy, what  would be a rational  firm's retention ratio?

Answer

The optimal retention ratio depends on the
firm's internal rate of return compared to the cost of equity

Answer

A
low retention ratio is favorable for growth firms

Answer

Dividend
policies should be set by external market analysts

Answer

Firms
with high retention ratios should issue high dividends

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