For a Dividend Paying Firm,how Is the Projected Addition to Retained

Multiple Choice

For a dividend paying firm,how is the projected addition to retained earnings calculated using the percentage of sales approach?

A) Net income × (1 - Retention ratio)
B) Net income × (1 - Dividend payout ratio)
C) (Cash dividends / Net income) × (New sales / Old sales)
D) (Retained earnings / Sales) × (New Sales / Old Sales)
E) Net income × (New Sales / Old Sales)