Detroit Imports Has a Dividend Payout Ratio of 35 Percent

question 17

Multiple Choice

Detroit Imports has a dividend payout ratio of 35 percent and annual dividends of $2.50 per share. What is the retention ratio?

• A) .167
• B) .208
• C) .650
• D) .735
• E) .792

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Definitions:

Price Level

A composite measure reflecting the prices of all goods and services in the economy relative to prices in a base year.

Consumer Spending

The total expenditure by households on goods and services within a certain period of time, a primary engine of economic activity.

Flow Variable

A flow variable is an economic measure that represents a movement or quantity that is reported per unit of time, such as income per year or spending per month.

Government Bonds

Government Bonds are debt securities issued by a government to finance public expenditure, typically promising to pay periodic interest payments and to return the face value on maturity.