A firm has a return on equity (ROE)of 15%. Dividend payout is 25% of net income. - 4453

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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