Dobson's Auto Earned $500,000 Last Year and Had a 20

question 28

Multiple Choice

Dobson's Auto earned $500,000 last year and had a 20% dividend payout ratio. How much did the firm add to its retained earnings?

• A) $325,000
• B) $425,000
• C) $250,000
• D) $400,000

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Definitions:

Capital at Risk

The amount of capital that could be lost in an investment due to various risks.

Insurance Company

An organization that provides financial protection and compensation for specified losses in return for payment of a premium.

Probability

The chance or odds of a specific event taking place.

Premiums

The amount paid for an insurance policy.