Think Tank Company Has an Expected ROE of 26

question 69

Multiple Choice

Think Tank Company has an expected ROE of 26%.The dividend growth rate will be _______ if the firm follows a policy of plowing back 90% of earnings.

• A)2.6%
• B)10%
• C)23.4%
• D)90% 26% * 0.90 = 23.4%.

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