The Shamrock Dogfood Company (SDC) has consistently paid out 44 percent of its earnings in dividends....
The Shamrock Dogfood Company (SDC) has consistently paid out 44 percent of its earnings in dividends. The company's return on equity is 16 percent. Do not round intermediate calculations. Round your answers to two decimal places.
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What would you estimate as its dividend growth rate?
%
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If you found out that the company was only growing at 2 percent, how much could the company afford to pay out?
%
Homework Answers
a) Growth rate =ROE * retention ratio
=56%*16%
=8.96%
b)
2%=16%*retention ratio
retention ratio =12.50%
afford to give out =100%-12.50% =87.50%
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The Shamrock Dogfood Company (SDC) has consistently paid out 44
percent of its earnings in dividends....
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