Option A i.e. not enough information is the correct answer.
In the above case, we cannot find ROE without having the value of Shareholder's Fund and Total profit available for them.
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There is a general consensus among analysts that Portis Inc. has a sustainable dividend growth rate...
There is a general consensus among analysts that Portis Inc. has a sustainable dividend growth rate of 5.5%. Given that Portis pays out 25% of its net incomes as dividends each year, what is the return on equity (i.e. ROE) for this firm? Question 23 options: 5.50% 7.33% Not enough information. 4.00%
We are examining the stock of Starbooks Inc. The consensus forecast by analysts is that the stock will generate earnings per share of $5 in the next year (EPS1=$5) and will pay $2 dividend per share next year (DPS1=$2). Starbooks maintains an ROE of 20%. The required rate of return on the stock is 16%. We use the Gordon constant growth model in which the constant growth rate is equal to the sustainable growth rate. According to the model, the...
Corporation has a dividend payout ratio of 25 percent and a sustainable growth rate of 12 percent. What is the company’s return on equity (ROE)
The sustainable growth rate a. is the highest growth rate attainable for a firm that pays no dividends b. is the highest growth rate attainable for a firm without issuing new stock. c. can never be greater than the return on equity. d. can be increased by decreasing leverage.
Problem 4-22 Sustainable Growth Rate [LO3] Cambria, Inc., had equity of $200,000 at the beginning of the year. At the end of the year, the company had total assets of $355,000. During the year the company sold no new equity. Net income for the year was $42,000 and dividends were $6,000. What is the sustainable growth rate for the company? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16) Sustainable growth rate What...
For a firm that pays no dividends, O a. Its return on equity will equal its sustainable growth rate. F COW O b. It is unable to pay any dividends. O c. It will have restrictions on its sustainable growth. e ti zdi da predlagala nila sa akin O d. Its shareholders will require a return equal to its return on equity. urne
Can you please assist with the Dividend payout and max sustainable growth rate? High Flyer, Inc., wishes to maintain a growth rate of 12 percent per year and a debt-equity ratio of .25. The profit margin is 5 percent, and total asset turnover is constant at 1.20. a. What is the dividend payout ratio? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal...
The cost of equity using the discounted cash flow (or dividend growth) approach Pierce Enterprises's stock is currently selling for $25.67 per share, and the firm expects its per-share dividend to be $1.38 in one year. Analysts project the firm's growth rate to be constant at 5.72%. Estimating the cost of equity using the discounted cash flow (or dividend growth) approach, what is Pierce's cost of internal equity? O 10.55% 11.66% 14.99% 11.10% Estimating growth rates It is often difficult...
5. Sustainable growth Aa Aa E As a firm grows, it must support increases in revenue with new investments in assets. The self-supporting, or sustainable, growth model helps a firm assess how rapidly it can grow, while maintaining a balance between its cash outflows (increases in noncash assets) and inflows (funds resulting from increases in liabilities or equity). Consider the following case of Cold Duck Manufacturing Inc.: Cold Duck Manufacturing Inc. has no debt in its capital structure and has...
5. Sustainable growth As a firm grows, it must support increases in revenue with new investments in assets. The self-supporting, or sustainable, growth model helps a firm assess how rapidly it can grow, while maintaining a balance between its cash outflows (increases in noncash assets) and inflows (funds resulting from increases in liabilities or equity). Consider the following case of Bohemian Manufacturing Company: Bohemian Manufacturing Company has no debt in its capital structure and has $300,000,000 in assets. Its sales...