Payout and retention ratio: Tradewinds company has revenues of $9,651,220, costs of $6,080,412, interest payment of $511,233, and a tax rate of 34 per cent. It paid dividends of $1,384,125 to shareholders. Find the company's dividend payout ratio and retention ratio.

Question

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The net income is calculated as: Revenues - Costs - Interest - Taxes = $9,651,220 - $6,080,412 - $511,233 - 34% of ($9,651,220 - $6,080,412 - $511,233). The dividend payout ratio is Dividends/Net Income, and the retention ratio is 1 - Dividend Payout Ratio.

Payout and Retention Ratio: Tradewinds Company Has Revenues of $9,651,220