If a Firm Pays Out 20% of Its Earnings as Dividends

question 2

Multiple Choice

If a firm pays out 20% of its earnings as dividends and has averaged a 20 percent return on equity, how quickly can the firm grow while maintaining a constant debt to equity mix?

• A) 6.4%.
• B) 10.2%.
• C) 16.3%.
• D) 19.0%.

---

Definitions:

Master Document

A container document that links to and controls multiple subdocuments, often used in word processing to manage large documents efficiently.

Lock Document

A feature that prevents unauthorized alteration by enabling password protection or limited editing rights in a digital document.

Screenshot Button

A tool or button that captures and saves an image of the current screen display.

Insert Screenshot

The action of capturing and adding an image of the current screen display to a document or presentation.