Suppose a Firm Pays Total Dividends of $750,000 Out of Net

question 26

Multiple Choice

Suppose a firm pays total dividends of $750,000 out of net income of $2 million. What would the firm's retention ratio be?

• A) 37.50 percent
• B) 47.50 percent
• C) 25.50 percent
• D) 62.50 percent

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Definitions:

Obesity

A medical condition characterized by excessive body fat that increases the risk of health problems such as heart disease and diabetes.

Grams

A metric unit of mass equal to one thousandth of a kilogram, used commonly in science and everyday life for measuring weight.

Very Low

typically describes a significantly reduced quantity, level, or intensity of something when compared to a standard or expected value.

Birthweight

The weight of a baby measured immediately after its birth, an important indicator of newborn health and developmental status.