What Is the Plowback Ratio for a Firm That Has

question 115

Multiple Choice

What is the plowback ratio for a firm that has earnings per share of $12.00 and pays out $4.00 per share as dividends?

• A)25.00 percent
• B)33.33 percent
• C)66.67 percent
• D)75.00 percent plowback = 1 - payout ratio
• = 1 -

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Definitions:

Unit Selling Price

The cost that a customer pays per unit of product purchased.

Total Cost Method

An accounting method used for handling inventory, where the cost of goods sold is determined by adding purchase costs less the ending inventory.

Total Cost Method

An accounting approach where all costs of production, including variable and fixed, are used to value inventory and determine cost of goods sold.

Government Agencies

Public sector organizations established at federal, state, or local levels to administer specific functions and services on behalf of the government.