If a Venture Has a Return on Assets ROA) =

question 24

Multiple Choice

If a venture has a return on assets ROA) = 10%, an equity multiplier based on beginning equity = 4.0 times, and a dividend payout ratio of 60%, the sustainable growth rate would be:

• A) 10%
• B) 16%
• C) 20%
• D) 24%
• E) 40%

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Definitions:

More Elastic

Describes a situation where the demand or supply for a good is more responsive to changes in price.

Monopolistically Competitive

A market structure featuring many sellers offering differentiated products, with free entry and exit in the market.

Demand Curve

A graph that illustrates the relationship between the price of a good or service and the quantity demanded by consumers.

Variable Costs

Expenses that change in proportion to the level of production or company activity.