A Firm Has a Return on Equity of 17

question 76

Multiple Choice

A firm has a return on equity of 17.8 percent, a return on assets of 11.3 percent, and a 65 percent dividend payout ratio.What is the sustainable growth rate?

• A)5.72 percent
• B)6.84 percent
• C)7.12 percent
• D)11.38 percent
• E)6.64 percent

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Definitions:

Beneficiary

A third party receiving benefits from a contract made between two other parties. Also, the person named in an insurance policy to receive benefits paid by the insurer in event of a claim.

Fire Insurance Policy

A contract that provides coverage against losses or damages caused by fire to property.

Premium

The consideration paid by the insured to the insurer for insurance protection.

Water Damage

Water damage refers to the destruction or harm caused to property by water intrusion, which can result from various sources like floods, leaks, or condensation.