Low Tech Company Has an Expected ROE of 10

question 38

Multiple Choice

Low Tech Company has an expected ROE of 10%.The dividend growth rate will be ________ if the firm follows a policy of paying 40% of earnings in the form of dividends.

• A)6.0%
• B)4.8%
• C)7.2%
• D)3.0% 10% *0.60 = 6.0%.

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Definitions:

Direct Labor Standard

A predefined measure of the amount of labor time that is considered necessary to produce one unit of output.

Cost Standards

Predetermined costs that serve as a benchmark for evaluating the actual performance and budgeting of a company.

Past Cost Data

Historical financial information on the costs associated with production, operations, or projects, used for planning and analysis.

Technology

The application of scientific knowledge for practical purposes, especially in industry.