1a. Last Year my profit margin was 12%. This year my profit margin is 15%. If I issue dividends following the same allocation % as last year, what will happen to my retained earnings.

a.The amount will stay the same

b.They will go down

c.They will go up

d.We cannot tell

1b. If a company is 100% debt financed, what is its return on equity

a. Not applicable

b. Depends on market value

c. Depends on net income

d. 0