Growth Rate = Return on Equity * Retention Ratio
Retention Ratio = 100% - Dividend Payout Ratio
= 100% - 60%
= 40%
Growth Rate = 12% * 40%
= 4.8%
Option C is correct.
Question 25 Stock IAM's required rate of return is 10 percent annually and its return on...
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ollapse QUESTION 18 A firm has a return on equity of 16 percent, a return on assets of 11 percent, and a 40 percent dividend payout ratio. What is the sustainable growth rat A 9.58 percent B10.62 percet C5.72 percent D.7.12 percent 64 percent QUESTION 19 Net working capital is defined as