A firm has a return on equity (ROE)of 15%. Dividend payout is 25% of net income - 3438

Solution Posted by
Solution Detail
Price: $1.25
  • From: ,
  • Posted on: Fri 23 Mar, 2012
  • Request id: None
  • Purchased: 0 time(s)
  • Average Rating: No rating
Request Description

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% 

Solution Description

A firm has a return on equity (ROE)of 15%.