A Company with a Return on Equity of 15 Percent

question 50

Multiple Choice

A company with a return on equity of 15 percent and a plowback ratio of 60 percent would expect a constant growth rate of:

• A)4 percent
• B)9 percent
• C)21 percent
• D)25 percent

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Definitions:

Classless Society

An envisioned social state without economic divisions or disparity where all individuals have equal status and opportunities.

Communism

A political and economic ideology advocating for a classless system where the means of production are owned communally and private property is nonexistent or severely curtailed.

Corporate Mergers

The combination of two or more companies into a single entity, often with the aim of boosting growth, reducing competition, and achieving economies of scale.

Oligopolies

Are giant corporations that control part of an economy. They are few in number and tend not to compete against one another. Instead, they can set prices at levels that are most profitable for them.