Describe Briefly Each of the Three Methods of Performing "What-If

question 52

Essay

Describe briefly each of the three methods of performing "What-If" analysis described in the text
and explain the analyst's main goal in performing each.

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Definitions:

Retains

Refers to the portion of earnings or profits that a company decides to keep rather than distribute to shareholders as dividends, often used for reinvestment.

Constant Ratio

A strategy involving maintaining a fixed percentage allocation among different asset classes.

Dividend Payout Ratio

A financial metric that shows the percentage of earnings a company distributes to its shareholders in the form of dividends.

Profit Margin

A financial metric indicating the percentage of revenue that exceeds the costs associated with making and selling the product, calculated as net income divided by revenue.