Exhibit 12.3 Use the Information Below for the Following Problem(S)

question 60

Multiple Choice

Exhibit 12.3
Use the Information Below for the Following Problem(S)
Assume that the dividend payout ratio will be 55 percent when the rate on long-term government bonds falls to 9 percent. Since investors are becoming more risk averse, the equity risk premium will rise to 8 percent and investors will require a 7 percent return. The return on equity will be 13 percent.
-Refer to Exhibit 12.3.What is the expected sustainable growth rate?

• A) 5.85
• B) 7.15
• C) 4.05
• D) 6.75
• E) 8.25

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Definitions:

Intercompany Scope

The range of activities or transactions that occur between different divisions or entities within a larger corporate group.

Intrafunctional Scope

Refers to operations or strategies that occur within a single business function or department, focusing on tasks and goals specific to that function.

Supply Chain Strategy

A plan for managing all the resources that go toward meeting customer demand for a product or service, from sourcing raw materials to delivering the final product.

Procurement

The process of obtaining goods or services, often involving tendering or bidding, to fulfill organizational needs.