Practice mode Finance

What does the retention ratio measure?

Correct answer D. Dividend policy

Explanation

The retention ratio is the share of net income kept in the business rather than paid as dividends. It therefore reflects the firm's dividend policy and feeds into its sustainable growth rate.

Report a problem

Answer checked How we write and check questions

Tip: press A, B, C or D to answer, and N for the next question.

Advertisement

Have a question about this answer?

Your email address will not be published. Required fields are marked *

Links and website addresses are not allowed in comments.