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Question 10

Essay

\quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad Law Specialists, Ine.
\quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad Selected financial information
20102011201220132014 Profit margin (%)6.894.940.110.325.25 Retention ratio (%)100.00100.00100.00100.0078.27 Asset turnover (X )2.782.472.032.002.23 Financial leverage (X)1.691.381.161.321.52 Growth rate in sales (%)22.8910.0528.763.5526.19\begin{array}{l}\begin{array}{rrrrr}&2010 & 2011 & 2012 & 2013 & 2014 \\\hline\text { Profit margin \( (\%) \)}&6.89 & 4.94 & 0.11 & 0.32 & 5.25 \\\text { Retention ratio \( (\%) \)}&100.00 & 100.00 & 100.00 & 100.00 & 78.27 \\\text { Asset turnover \( (\mathrm{X} \) )}&2.78 & 2.47 & 2.03 & 2.00 & 2.23 \\\text { Financial leverage \( (\mathrm{X}) \)}&1.69 & 1.38 & 1.16 & 1.32 & 1.52 \\\text { Growth rate in sales \( (\%) \)}&22.89 & -10.05 & -28.76 & 3.55 & 26.19 \\\hline\end{array}\end{array}

-Please refer to the selected financial information for Law Specialists,Inc.above.Law Specialists paid its first dividends in 2014.As an analyst,assess the company's decision to pay dividends.

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