Question

(Measuring growth) Given that a firms return on equity is 16 percent and management plans to retain 36 percent of earnings f
0 0
Add a comment Improve this question Transcribed image text
Answer #1

Growth rate

= Return on equity x Retention ratio

= 16% x 0.36

= 5.76%

So, the growth rate is 5.76%

Add a comment
Know the answer?
Add Answer to:
(Measuring growth) Given that a firm's return on equity is 16 percent and management plans to retain 36 percent of...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • (Measuring growth) Given that a​ firm's return on equity is 15 percent and management plans to retain 36 percent of...

    (Measuring growth) Given that a​ firm's return on equity is 15 percent and management plans to retain 36 percent of earnings for investment​ purposes, a.  The​ firm's growth rate will be: ​(Round to two decimal​ places.) b.  If the firm decides to increase its retention​ ratio, what will happen to the value of its common​ stock?  ​ An increase in the retention rate will: (increase or decrease) the rate of growth in​ dividends, which in turn will: (increase or decrease)...

  • (Measuring growth) Given that a firm's return on equity is 24 percent and management plans to...

    (Measuring growth) Given that a firm's return on equity is 24 percent and management plans to retain 42 percent of earnings for investment purposes, what will be the firm's growth rate? If the firm decides to increase its retention rate, what will happen to the value of its common stock? a. The firm's growth rate will be %. (Round to two decimal places.) b. If the firm decides to increase its retention ratio, what will happen to the value of...

  • Given that a​ firm's return on equity is 15 percent and management plans to retain 44...

    Given that a​ firm's return on equity is 15 percent and management plans to retain 44 percent of earnings for investment​ purposes, what will be the​ firm's growth​ rate? If the firm decides to increase its retention​ rate, what will happen to the value of its common​ stock? a. The​ firm's growth rate will be________% (Round to two decimal​ places.) b. If the firm decides to increase its retention​ ratio, what will happen to the value of its common​ stock?...

  • Given that a firm's return on equity is 24 percent and management plans to retain 45...

    Given that a firm's return on equity is 24 percent and management plans to retain 45 percent of earnings for investment purposes, what will be the firm's growth rate? If the firm decides its retention rate, what will happen to the value of its common stock? a. The firm's growth rate will be.

  • (Measuring growth) Thomas, Inc.'s return on equity is 19 percent and management has plans to retain...

    (Measuring growth) Thomas, Inc.'s return on equity is 19 percent and management has plans to retain 23 percent of earnings for investment in the company. a. What will be the company's growth rate? b. How would the growth rate change if management (1) increased retained earnings to 32 percent or (ii) decreased retention to 12 percent? a. The company's growth rate will be %. (Round to two decimal places.) b.) If management increased retained earnings to 32%, the growth rate...

  • Question 8: (10 points). (Measuring growth) Given that a firm's return on equity is 22 percent...

    Question 8: (10 points). (Measuring growth) Given that a firm's return on equity is 22 percent and management plans to retain 37 percent of earnings for investment purposes, what will be the firm's growth rate? If the firm decides to increase its retention rate, what will happen to the value of its common stock? (Round to two decimal places.) a. The firm's growth rate will be b. If the firm decides to increase its retention ratio, what will happen to...

  • Question 6: (5 points). (Measuring growth) If Pepperdine, Inc.'s return on equity is 14 percent and...

    Question 6: (5 points). (Measuring growth) If Pepperdine, Inc.'s return on equity is 14 percent and the management plans to retain 55 percent of earnings for investment purposes, what will be the firm's growth rate? (Round to two decimal places.) The firm's growth rate will be | | %

  • If a firm's return on equity is 17% and management plans to retain 40% of earnings...

    If a firm's return on equity is 17% and management plans to retain 40% of earnings for investment purposes, what will be the firm's growth rate?

  • Thomas, Inc.'s return on equity is 12 12 percent and management has plans to retain 24...

    Thomas, Inc.'s return on equity is 12 12 percent and management has plans to retain 24 24 percent of earnings for investment in the company. a.  What will be the​ company's growth​ rate? b.  How would the growth rate change if management​ (i) increased retained earnings to 35 35 percent or​ (ii) decreased retention to 15 15 ​percent? a.  The​ company's growth rate will be 2.88 2.88 ​%. ​(Round to two decimal​ places.) b. ​(i) If management increased retained earnings...

  • Bookmatch 8-14 (book/static) Question Help (Measuring growth) Given that a firm's return on equity is 18...

    Bookmatch 8-14 (book/static) Question Help (Measuring growth) Given that a firm's return on equity is 18 percent and management plans to retain 40 percent of earnings for investment purposes, what will be the firm's growth rate? The firm's growth rate will be 96. (Round to two decimal places.) (Common stock valuation) Sanford common stock is expected to pay $1.85 in dividends next year, and the market price is projected to be $51.35 per share by year-end. If investors require a...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT