To part A of Example 6, its mentioned that b is the retained earnings as a percentage of EPS. Do we use EPS as an indicator of Profits after interest and tax? Or am I just getting this totally wrong?
Earnings are profits after interest an tax. EPS is earnings divided by the number of shares.
Some of the earnings will be paid as dividends, what is not paid is retained in the company and used for expansion.
You must be logged in to reply to this topic.