Suppose a Firm Has a Retention Ratio of 55 Percent

question 94

Multiple Choice

Suppose a firm has a retention ratio of 55 percent and net income of $7 million. How much does it pay out in dividends?

• A) $3,850,000
• B) $3,150,000
• C) $3,450,000
• D) $3,550,000

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Definitions:

Mode

The value that occurs most frequently in a given data set.

Symmetric Distribution

A distribution where data is evenly distributed around the mean, with the left half mirroring the right half.

Mean

The central value of a dataset, calculated as the sum of all the numbers divided by the count of numbers in the dataset.

Variability

The extent to which data points in a statistical distribution or data set diverge from the average or mean, indicating the dispersion in the dataset.