The Plowback Ratio

question 236

Multiple Choice

The plowback ratio:

• A) Is equal to net income divided by the change in total equity.
• B) Shows the percentage of net income available to the firm for future growth.
• C) Plus the retention ratio must equal 100 percent.
• D) Is equal to the change in retained earnings divided by the dividends paid.
• E) Represents the earnings returned to the shareholders.

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Definitions:

Knowledge Gap

The difference between what is known and what needs to be known to effectively understand or perform an activity.

Pricing Strategies

Various approaches businesses use to set prices for their products or services to maximize profitability and meet market demand.

Perishable

Describes products or services that have a limited life span or expiry date, after which they are no longer usable or valuable.

Empowerment Gap

The disparity between groups in their access to resources and opportunities that allow for empowerment and decision-making.