Retention Ratio page 72/73 Schweser Equity wrong, around, example

Viceroy

Do they have the retention ratio an payout ratio the wrong way around in the blue box? Dividend/Earnings, seems like a payout ratio no? they have it as the retention ratio (in the example, it’s 50% anyways, so it’s confusing)

ruchita

It is correct - they don’t define it as dividend/earnings. They simply skip the step to show that RE = earnings - div
As you stated since RR and payout are both 50%, it can be confusing when you use div $ amount (which happens to be RE for the year) in the numerator of the RR.