Suppose a Firm Has a Retention Ratio of 85 Percent

question 93

Multiple Choice

Suppose a firm has a retention ratio of 85 percent and net income of $225 million. How much does it pay out in dividends?

• A) $33,750,000
• B) $175,000,000
• C) $191,250,000
• D) $225,000,000

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Definitions:

Normative Commitment

The level of an individual's psychological attachment to an organization because of a sense of obligation.

Socialization Practices

Processes through which individuals learn the skills, knowledge, norms, and values necessary to perform their roles and adapt to a group or organizational culture.

Normative Commitment

An individual's psychological attachment to an organization, based on a sense of obligation.

Affective Commitment

An employee's emotional attachment to, identification with, and involvement in an organization.