Homework Answers
Growth Rate = Retention Rate * Return on Equity
= 70% * 12%
= 8.40%
Hence the correct answer is 8.40%
---------------
Next Year's Earnings = Current Year Earnings * ( 1+ Growth rate)
= $ 34.13 Million * ( 1+ 8.4%)
= $ 36.99692 Million
= $ 36,996,920
Hence the correct answer is $ 36,996,920
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