Ed and Carol Have a Daughter Named Bonnie Who Has

question 93

Multiple Choice

Ed and Carol have a daughter named Bonnie who has just received a score of 155 on her IQ test. According your text, Ed and Carol should

• A) enroll Bonnie in a private school.
• B) push Bonnie to succeed.
• C) do nothing special.
• D) have Bonnie skip a grade or two in school.
• E) gloat about Bonnie's brilliance whenever she is near.

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Definitions:

Equity Multiplier

A financial ratio indicating how much of a company's assets are financed by shareholders' equity.

Dividend Payout Ratio

The fraction of net income a firm pays to its stockholders in dividends, expressed as a percentage of the company's total earnings.

Retention Ratio

The proportion of earnings kept back in a company to reinvest, rather than being paid out as dividends.

Sustainable Growth Rate

The maximum rate at which a company can grow its sales, earnings, and dividends without having to increase debt or equity financing.