What is the retention ratio or plowback ratio

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Reference no: EM133132208

Question - ABC Corporation's financial information as of December 31, 2017 stated the following:

Price-Earnings Ratio - 4:1

Dividend per share for common stocks - P3.00

Net Income - P1,200,000

Outstanding common stocks - 100,000 shares

Average common equity - P2,000,000

Growth rate on common equity - 3.5%

Required -

1. What is the retention ratio or plowback ratio?

2. What is the expected price of the common stock on December31, 2018?

Reference no: EM133132208

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