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Which of the Following Is Correct for a Firm with EPS

Question 7

Multiple Choice

Which of the following is correct for a firm with EPS of $2 per share and a 40 percent payout ratio?


A) 40 percent of earnings will be plowed back into the firm
B) Dividends will equal 60' per share
C) Book value per share of equity will increase by $1.20
D) Retained earnings will be unchanged

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