Mercury Corp. has annual sales of $2,512,654, costs of $1,080,227, interest payments of $132,375, and a tax

Question:

Mercury Corp. has annual sales of $2,512,654, costs of $1,080,227, interest payments of $132,375, and a tax rate of 34 percent. It pays annual dividends of $525,000 to its stockholders. Calculate the firm’s dividend payout ratio and retention ratio.

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...