Dividend Growth Rate, Retention Rate, and ROE Analysis

If Diaz's profit margin and dividend growth rate are increasing faster than the industry average but have slowed down significantly in the past few years, what phase of its life cycle is Diaz _most likely_ in?

Incorrect. Companies in the growth stage typically don't pay dividends and are instead heavily reinvesting their earnings.

Incorrect. Companies in the mature stage have growth rates similar to the industry average.

Yes! During the transition stage, earnings and dividends are both growing, but it's at a slower rate due to the competitive and regulatory forces.

Mature

Growth

Transition