At January 1, 2015, Alligator Industries Reported Retained Earnings of $150,000

question 65

Multiple Choice

At January 1, 2015, Alligator Industries reported retained earnings of $150,000. During 2015, Alligator had a net loss of $30,000 and paid dividends of $15,000. At December 31, 2015, the amount of retained earnings is

• A)$105,000.
• B)$120,000.
• C)$135,000.
• D)$165,000.

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Definitions:

Dividend Payout Ratio

The dividend payout ratio is the proportion of earnings paid to shareholders in the form of dividends, expressed as a percentage of the company's total earnings.

Investor Risk Aversion

A measure of an investor's tolerance for risk and their capability to endure financial losses.

Inflation

The pace at which prices for services and goods generally ascend, reducing the value of money.

P/E Ratios

The Price to Earnings ratio, a valuation metric used to compare the market value of a stock to its earnings per share, indicating how much investors are willing to pay per dollar of earnings.