What Proportion of Earnings Is Being Plowed Back into the Firm

question 107

Multiple Choice

What proportion of earnings is being plowed back into the firm if the sustainable growth rate is 8% and the firm's ROE is 20%?

• A) 60%
• B) 80%
• C) 20%
• D) 40%

---

Definitions:

Donee Beneficiary

A third party who stands to benefit from a contract, especially when the contract is intended as a gift to that third party.

Assignor

An individual or entity that transfers rights or interests in a contract to another, known as the assignee.

Assignee

A person or entity to whom rights or interests are transferred by another, known as the assignor.

Delegator

A delegator is a person or entity that assigns duties or responsibilities to another, often in the context of a contractual or work-related relationship.