Suppose a Firm Has a Retention Ratio of 15 Percent

question 105

Multiple Choice

Suppose a firm has a retention ratio of 15 percent, net income of $60 million, and 15 million shares outstanding. What would be the dividend per share paid out on the firm's stock?

• A) $0.25
• B) $0.60
• C) $3.40
• D) $4.00

---

Definitions:

"All-Nighters"

Extended work or study sessions that last throughout the night, often used to meet deadlines or prepare for exams.

Term Paper

An academic assignment or research paper that is usually due at the end of a term or semester.

Prospect Theory

An economic theory that describes how people choose between probabilistic alternatives that involve risk, where the probabilities of outcomes are uncertain.