True or False? All else equal, a large and stable business is more likely to maintain a higher dividend payout ratio than a smaller, faster growing business.

Correct Answer: True

A large and stable business that doesn't need to reinvest large amounts of its earnings back into the business in order to grow, can typically afford to maintain a much higher dividend payout ratio than a smaller, faster growing business that fuels its growth by plowing most of the profits back into the business.