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Assume a Firm with 5,000 Shares Outstanding Earns $10 Per

Question 60

Multiple Choice

Assume a firm with 5,000 shares outstanding earns $10 per share and has a 30% plowback ratio.In this case retained earnings will:

A) increase by $15,000.
B) increase by $50,000.
C) decrease by $15,000.
D) decrease by $50,000.

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