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

Question

Quizplus · Accepted Answer

The firm's net income is calculated as (Revenues - Costs - Interest) * (1 - Tax Rate). The dividend payout ratio is Dividends / Net Income, and the retention ratio is 1 - Dividend Payout Ratio.

Payout and Retention Ratio: Tradewinds Corp