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Basic Question 14 of 16
If a company's dividend payout ratio is 20%, then its retention rate is ______.
B. 80%
C. 25%
A. 5 times
B. 80%
C. 25%
User Contributed Comments 9
| User | Comment |
|---|---|
| Done | If you get this one wrong you have issues |
| Nikita | I almost did, was thinking too much ha. |
| Masterkang | What is there to think about? |
| eb2568 | Now that is my kind of question! |
| tochiejehu | easy one dear |
| praj24 | Snap! kept thinking it's too good to be true :P |
| nabada0419 | Retention Ratio = (NI - Div)/ NI = 1 - Div Payout Ratio |
| Inaganti6 | Don't show up at the exam if you got this wrong. |
| MathLoser | I have tissue |
I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes
Learning Outcome Statements
explain the rationale for using present value models to value equity and describe the dividend discount and free-cash-flow-to-equity models
calculate and interpret the intrinsic value of an equity security based on the Gordon (constant) growth dividend discount model or a two-stage dividend discount model, as appropriate
identify characteristics of companies for which the constant growth or a multistage dividend discount model is appropriate
explain advantages and disadvantages of each category of valuation model
CFA® 2025 Level I Curriculum, Volume 3, Module 8.