Gabriel Furniture has a profit margin of 8.2 percent and a dividend payout ratio of 30 percent. What is the plowback ratio?
A) 10.66 percent
B) 27.33 percent
C) 54.60 percent
D) 70.00 percent
E) 78.20 percent

Question

Quizplus · Accepted Answer

The plowback ratio is the portion of earnings not paid out as dividends, which is 1 minus the dividend payout ratio. Therefore, the plowback ratio is 1 - 0.30 = 0.70 or 70.00 percent.

Gabriel Furniture Has a Profit Margin of 8