Calculate Retention Ratio Given the Following Information: Net Income =

question 286

Multiple Choice

Calculate retention ratio given the following information: net income = $8,000; cash dividends paid = $4,400.

• A) 55%
• B) 45%
• C) 35%
• D) 25%
• E) 15%

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Definitions:

Foreign Firms

Companies that are based in one country but operate and conduct business in other countries.

EAFE Index

An index that measures the stock market performance of developed markets outside of the United States and Canada.

Non-U.S. Stocks

Shares of companies based outside of the United States, often used to diversify investment portfolios.

CAPM

The Capital Asset Pricing Model, a theory that describes the relationship between risk and expected return for assets, particularly stocks.