Super-normal growth refers to a firm that increases its dividend by:
a. three or more percent per year.
b. a rate which is most likely not sustainable over an extended period of time.
c. a constant rate of 2 or more percent per year.
d. $0.10 or more per year.
e. an amount in excess of $0.50 a year.
Dividends are the payment that shareholders receive as a consequence of the distribution of earnings that a company generates. The dividends can be provided in different ways such as cash or shares.
Answer and Explanation:
The correct answer is b. a rate which is most likely not sustainable over an extended period of time.
Super-normal growth is the situation in which the dividends are increasing at a very high rate that is referred as "supernormal". However, this high growth is expected to be unsustainable.
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from Finance 101: Principles of FinanceChapter 14 / Lesson 3