Purchase Solution

Explain and compute the retention ratio

Not what you're looking for?

Ask Custom Question

Quick question: If I have net income of $3600, expected dividend of 1098 and a 34% tax rate, how would I figure my retention ratio?

Purchase this Solution
Solution Summary

The solution presents an explanation of the retention ratio and then calculated the answer based on data provided in the posting. The information about the tax rate is explained in relation to the ratio.

Solution Preview

What is the retention ratio? How is the retention ratio calculated?

The amount, expressed as a percentage, of a company's earnings that is retained in a ...

Purchase this Solution
Free BrainMass Quizzes
Marketing Research and Forecasting

The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.

SWOT

This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.

Paradigms and Frameworks of Management Research

This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.

Business Processes

This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.

Accounting: Statement of Cash flows

This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.

View More Free Quizzes
Related BrainMass Solutions

  • Forecasting inventories & end-of-year retained earnings

    Retained Earnings in a year = Net Income * Retention Ratio Retention Ratio = 1- Dividend Payout Ratio = 1=0.25 =0.75 Retained Earnings = 2341*0.75=1755.75 End of the year Retained Earnings= Beginning of the year + During the year

  • Determining Sustainable Growth Rate

    236261 Determining Sustainable Growth Rate A firm has a total asset turnover of 2, a net profit margin of 5%, and a debt ratio of 50%. If the firm has a dividend payout ratio of 20%, calculate its sustainable growth rate.

  • Growth rate in dividends

    Transaction Audit Objectives Expected dividend growth rate= Retention rato* return on equity Retention ratio= 1- Dividend pay out ratio Note: *** Remember, this service is not intended to be used as "homework completion, I am giving you the instructional

  • Growth Rate of Butler's Inc

    Response provides steps to compute the growth rate.

  • Capital Asset Pricing Model, ROE

    Explain your decisions. 3. Describe the components of business risk, and discuss how the components affect the variability of operating earnings (EBIT). 4.

  • Dividend growth rate

    Recall that the retention ratio is the plowback or earnings retention, and is sometimes written as (1- Dividend Payout Ratio). In 2008 the MKA Corporation reports EPS of $5.75, ROE equals 15% and the company has a dividend payout ratio of 60%.

  • Firm's dividend payout ratio and retention ratio

    Find the firm's dividend payout ratio and retention ratio Firm's dividend payout ratio and retention ratio Dividend payout ratio= Dividend/Net Income *100 =34125/40304 =84.67%= Answer Net Income = PBT--taxes =61067-34%*61067 =$40304 Note

  • Computation of cost of equity

    by Khan and Jain Thank you, This shows how to compute cost of equity by practical example

  • Dividend Valuation Model, Convertibles, Warrants

    Earnings= $820 million Dividend payout ratio= 20% Therefore retention ratio=1-Dividend payout ratio= 80% Amount retained= Retention ratio x Earnings= $656 million = 0.8 x 820 Therefore, the company's retained earnings

View More Related Solutions