Rondolo, Inc. maintains a constant dividend payout ratio. What is the retention ratio?

Name: Rondolo, Inc. maintains a constant dividend payout ratio. What is the retention ratio?
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Since the dividend payout ratio is constant, the retention ratio can be calculated as 1 - dividend payout ratio. If we assume the dividend payout ratio to be 45%, then the retention ratio would be 55%, which is the closest option to 45%. Therefore, the best choice is (B) 55%.