A bank has decided to retain more of their earnings,moving their retention ratio from 40% to 70%.What way of meeting their capital needs is the bank taking?

Question

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By changing their retention ratio from 40% to 70%, the bank is deciding to retain more of their earnings instead of paying them out as dividends. This means they will have more funds available to meet their capital needs without having to issue new securities or sell assets. Therefore, the bank is taking the option of changing their dividend policy as a way to meet their capital needs.

A Bank Has Decided to Retain More of Their Earnings,moving