Problem:
Drekker, Inc., has revenues of $312,766, costs of $220,222, interest payment of $31,477, and a tax rate of 34 percent. It paid dividends of $34,125 to shareholders.
Required:
Question: Find the firm's dividend payout ratio and retention ratio.
- 45%, 55%
- 85%, 15%
- 55%, 45%
- 15%, 85%
Note: Provide support for your underlying principle.