What Will Be the Effect on Retained Earnings If a Firm

question 117

Multiple Choice

What will be the effect on retained earnings if a firm with 5,000 shares outstanding earns $10 per share and has a 30% plowback ratio? It will increase by:

• A) $15,000.
• B) $30,000.
• C) $35,000.
• D) $50,000.

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Definitions:

μ

The symbol representing the mean (average) of a population in statistics.

T-Statistic

Re-defined: A value calculated from sample data during a t-test, used to assess the significance of the difference between two sample means.

α

Represents the level of significance in hypothesis testing, typically set at 0.05 or 5%.

P > .05

A statistical expression indicating that the probability of the observed data, or something more extreme, if the null hypothesis is true, is greater than 5%.