Net income of firm has two distinct uses. Accordingly, one of the following statements has to be true always.

Question 21 options:

	One minus the dividend payout ratio should always equal the net income of firm.
	One minus the earnings retention ratio should always equal the plowback ratio
	The dividend payout ratio should always be the inverse of the plowback ratio.
	The dividend payout ratio and the earnings retention ratio should always add to 1.0