QUESTION 54 Suppose a company earns a profit this year and has a dividend payout ratio of one half. What does this mean? It will have no retained earnings. Its book value at the beginning of next year will be less than that of this year. It will not pay out all its earnings as dividends. All the above QUESTION 55 What is the general distinction between dealers and banks? Dealers buy and sell securities, banks borrow and lend money Dealers borrow and lend money: banks buy and sell securities Dealers use their balance sheet for their business, banks do not Dealers have minimum capital requirements, banks do not