A Firm Projects Net Income to Be $500,000, Intends to Pay

question 10

Multiple Choice

A firm projects net income to be $500,000, intends to pay out $125,000 in dividends, and had $2 million of equity at the beginning of the year. The firm's sustainable growth rate is:

• A) 5%
• B) 18.75%
• C) 6.25%
• D) 4.69%
• E) none of the above

---

Definitions:

International Price

The price of goods or services considered on a global scale, often affected by exchange rates, tariffs, and global supply and demand.

US$ Per C$

A currency exchange rate that shows how much US dollars is worth in Canadian dollars.

Importer

An individual or company that buys goods or services from abroad for sale in their home country.

Service Charge

A fee collected by a bank, institution, or service provider for the provision of a service, often associated with transactions or account maintenance.