The Wintergrass Company has an ROE of 15.1 percent and a payout ratio of 40 percent....

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Question

The Wintergrass Company has an ROE of 15.1 percent and a payout ratio of 40 percent....

The Wintergrass Company has an ROE of 15.1 percent and a payout ratio of 40 percent.

What is the company’s sustainable growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Sustainable growth rate

%

business finance

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Answer 1

Answer #1

Ans 9.06%

Retention Ratio =	( 1 - Dividend Payout Ratio)
	1 - 40%
	60%


Sustainable Growth Rate =	Retention Ratio *Return on Equity
	60% * 15.1%
	9.06%

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Answer 2

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