Assertion: The dividend in growth companies is higher than that in the non– growth companies. Reasoning: Companies having good growth opportunities retain more money out of their earnings so as to finance the required investment.

Both Assertion (A) and reasoning (R) are correct and R is the correct explanation of A. Both Assertion (A) and reasoning (R) are correct and but R is not the correct explanation of A. Assertion (A) is true but Reasoning (R) is not correct. Assertion (A) is not true but Reasoning (R) is correct.

Assertion (A) is not true but Reasoning (R) is correct.

Companies having good growth opportunities retain more money out of their earnings so as to finance the required investment. The dividend in growth companies is, therefore, smaller, than that in the non growth companies.