If a Venture Has a Return on Assets (ROA)of 10

question 56

Multiple Choice

If a venture has a return on assets (ROA) of 10%, an equity multiplier based on beginning equity of 3.5 times, and a retention rate of 50%, the sustainable growth rate would be:

• A)10.0%
• B)17.5%
• C)20.0%
• D)35.0%

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Definitions:

Major Division

A significant separation or segmentation within an organization, market, or field of study, typically characterized by distinct functions, products, or specialties.

Sarbanes-Oxley Act

A United States federal law that was enacted in 2002 to protect investors from the possibility of fraudulent accounting activities by corporations.

Lead Auditor

A senior auditor responsible for managing the audit team and overseeing the audit process to ensure accuracy and compliance.

Close Corporation

A type of corporation that is often privately held and has a small number of shareholders. The corporate stock is not publicly traded and is subject to greater restrictions on its transferability.