The Following Information Relates to Yutter Corporation -What Is Yutter's Sustainable Equity Growth Rate?
A)9

question 64

Multiple Choice

The following information relates to Yutter Corporation:
$\begin{array}{lr}&\text { Year } 1\\\text { Net income-year ended } 12 / 31 & \$ 12,500 \\\text { Dividends } & 3,000 \\\text { Return on net operating assets } & 13 \% \\\text { Return on equity } & 15 \% \\\text { Cost of equity } & 12 \%\end{array}$
-What is Yutter's sustainable equity growth rate?

• A)9.12%
• B)9.88%
• C)11.4%
• D)12.0%

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Definitions:

After-Tax Dollar Value

The net value of an investment, income, or transaction after accounting for the effects of income taxes.

Realized Profits

The gains earned and received from the sale of assets or investments.

Tax Rate

The rate at which a person or company is taxed by the state.

Unrealized

Referring to profits or losses that have occurred on paper due to changes in the value of assets or investments but have not been actualized through a sale or transaction.