If Forecasted Net Income Is $3,600

question 16

Multiple Choice

If forecasted net income is $3,600.00 and the expected dividend is $1,098 and the tax rate is 34%, what is the retention ratio?

• A) .30.
• B) .198.
• C) .802.
• D) .70.

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Definitions:

Quarterly Payments

Regular payments made every three months, commonly used in dividend distributions or repayment of loans.

Rate of Return

Variation in the worth of an investment over a specific interval, depicted as a percentage of the investment's initial outlay.

Discount Rate

The interest rate used to discount future cash flows to their present values.

Present Value

The current financial assessment of a sum of money in the future or ongoing cash flows, based on a specific rate of return.