Other things being equal, a low ________ would be most consistent with a relatively high growth rate of firm earnings.

A) dividend-payout ratio
B) degree of financial leverage
C) variability of earnings
D) inflation rate

Dividend-payout Ratio

The fraction of net income a firm pays to its shareholders in dividends, expressed as a percentage of the company’s total earnings.

Growth Rate

The rate at which a company, economy, or investment grows over a specific period, often expressed as a percentage.

Financial Leverage

Financial leverage is the use of borrowed funds to increase an investment's potential return, which also increases the risk of loss.