1. A company seeking to fight off a hostile takeover might employ the service of an investment banking firm to develop a defensive strategy. What are the implications of this type of strategy? Is it in the best interest of shareholders?
2. Suppose a firm has a retention ratio of 39 percent and net income of $5.4 million. How much does it pay out in dividends?
3. Suppose a firm has a retention ratio of 46 percent and net income of $8.0 million. How much does it pay out in dividends?