Question: Consider the Additional Funds Needed (AFN) equation, what happens to AFN if the firm decreases their retention ratio? AFN increases AFN stays the same AFN

Consider the Additional Funds Needed (AFN) equation, what happens to AFN if the firm decreases their retention ratio?

AFN increases

AFN stays the same

AFN is not affected by profit margin

its hard to say exactly

AFN decreases

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