easy · Principles of Finance cost-of-capital-structure

A company has a Net Income of $200 million and total common equity of $1,000 million at the start of the year.

If the company pays $60 million in dividends, what is the 'Retention Ratio' (b)?

  1. 0.60
  2. 0.14
  3. 0.30
  4. 0.70

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