Addition to Retained Earnings: Hilton Company Has Revenues of $1,214,800

question 24

Multiple Choice

Addition to retained earnings: Hilton Company has revenues of $1,214,800 and costs of $816,355, and pays a tax rate of 32 per cent. If the company pays out 50 per cent of its earnings as dividends every year, what is the amount of retained earnings?

• A) $135,471.30
• B) $270,942.60
• C) $413,032.00
• D) None of the above.

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Definitions:

Shareholders

Individuals or entities that own shares in a corporation and therefore have a claim on part of the company's assets and earnings.

Going Private

The process by which a publicly traded company is transformed into a privately held entity.

Hostile Takeover

A takeover to which the management of the target corporation objects.

Leveraged Buyout

The acquisition of a company using a significant amount of borrowed money (bonds or loans) to meet the cost of acquisition.