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) 0.30.
B) 0.198.
C) 0.802.
D) 0.70.

Name: 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) 0.30. B) 0.198. C) 0.802. D) 0.70.
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Question

Quizplus · Accepted Answer

The retention ratio is calculated as (Net Income - Dividends) / Net Income. Here, it is ($3,600 - $1,098) / $3,600 = 0.70.

If Forecasted Net Income Is $3,600