Suppose a Firm Has a Retention Ratio of 55 Percent

question 94

Multiple Choice

Suppose a firm has a retention ratio of 55 percent and net income of $7 million. How much does it pay out in dividends?

• A) $3,850,000
• B) $3,150,000
• C) $3,450,000
• D) $3,550,000

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Definitions:

Employment-At-Will Doctrine

A legal principle that allows employers and employees to terminate employment at any time without reason, as long as it does not violate any contract or law.

Public-Policy Exception

A legal doctrine that prevents employers from terminating employees in violation of well-established public policy of the state.

Whistle-Blowers

Individuals who expose illegal, unethical, or improper conduct within an organization, often facing significant personal and professional risk.

Job Dissatisfaction

Is the feeling of being unhappy with one’s job. It is a major cause of voluntary turnover.