Which One of the Following Is a Basis Point

question 10

Multiple Choice

Which one of the following is a basis point?

• A) 1 percent
• B) 0.1 percent
• C) 0.01 percent
• D) 0.001 percent
• E) 0.0001 percent

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Definitions:

Net Income

The total amount of profit a company earns after taxes and all expenses have been deducted from revenues, commonly referred to as the bottom line.

Sustainable Growth Rate

The highest speed at which a business can expand its profits without having to raise its debt levels or issue more equity.

Retention Ratio

The percentage of net income that is retained to be reinvested in the business, rather than being paid out as dividends.

Dividend Payout Ratio

The percentage of earnings paid to shareholders in dividends, calculated by dividing the total amount of dividends by the net income of the company.