Monday 11 June 2012

A firm has a return on equity (ROE)of 15%. Dividend payout is 25% of net income.

A firm has a return on equity (ROE)of 15%. Dividend payout is 25% of net income. Leverage is 1.20. What is the sustainable rate of growth?
a. 3.75%
b. 4.28%
c. 11.25%
d. 13.50%
 

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