Wilt's Has Earnings Per Share of $2

question 11

Multiple Choice

Wilt's has earnings per share of $2.98 and dividends per share of $0.35.What is the firm's sustainable rate of growth if its return on assets is 14.6% and its return on equity is 18.2%?

• A) 2.14%
• B) 1.71%
• C) 12.89%
• D) 16.06%

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Definitions:

Straight-Line Method

A method of calculating depreciation of an asset where the expense is evenly distributed over its useful life.

Scrap Value

The estimated resale value of an asset at the end of its useful life, often considered when calculating depreciation.

Units-Of-Production Method

A depreciation method that allocates expense based on the actual usage or production levels of the asset.

Scrap Value

The estimated residual value of an asset after it has reached the end of its useful life and is no longer economically serviceable.