Question

To raise money, a company is selling shares of "dividend growth" stock. What does the company MOST LIKELY do with its earnings? A. Pays it all out to stockholders, four times a year. B. Reinvests it quarterly in order to expand the company. C. Pays out some to stockholders and reinvests the rest in its business. D. Invests it in company stock, which it then sells at a discount to stockholders.

Answer 1

The company is most likely to C. pay out some of its earnings to stockholders as dividends and reinvest the remaining portion back into the business to promote further growth.

Step-by-step explanation:

When a company sells shares of 'dividend growth' stock, it means that the company is offering stocks to investors that have the potential to increase in value over time and provide regular dividends to shareholders. Dividends are a portion of a company's profits that it distributes to its shareholders as a form of cash payment.

In this case, the company is most likely to pay out some of its earnings to stockholders as dividends and reinvest the remaining portion back into the business to promote further growth. Thus, this allows the company to both reward its investors with dividends and to continue growing and expanding its operations through reinvestment.