Which of the Following Is True for a Firm Having

question 110

Multiple Choice

Which of the following is true for a firm having a stock price of $42, and expected dividend of $3, and a sustainable growth rate of 8 percent?

• A)It has a required return of 22 percent
• B)It has a dividend payout ratio of 37.5 percent
• C)It has an ROE of 7.14 percent
• D)It has a plowback rate of 7.14 percent $42 = $3/(r - .08)

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Definitions:

Balance Sheet

A financial statement that reports a company's assets, liabilities, and stockholders' equity at a specific point in time, providing insights into its financial health and stability.

Statement of Cash Flows

A document that consolidates data about cash receipts from operational and investment activities, and cash outflows for business and investment spending, all recorded during a given period.

Statement of Stockholders' Equity

A financial document that outlines the changes in the value of a company's equity over a specific period due to earnings, dividends, and other equity adjustments.

Statement of Stockholders' Equity

A financial document that shows changes in the value of a company's equity over a specific period, including shares issued, dividends, and earnings.