A Firm Has a Return on Equity of 20% and a Dividend-Payout

question 108

Multiple Choice

A firm has a return on equity of 20% and a dividend-payout ratio of 30%. The firm's anticipated growth rate is

• A) 6%.
• B) 10%.
• C) 14%.
• D) 20%.

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Definitions:

Incorrect Decisions

Decision-making instances that lead to unfavorable outcomes or failures due to errors in judgement, analysis, or implementation.

Target AAR

Target Average Annual Return (AAR) is a financial goal or benchmark for the average yearly return on an investment.

Project AAR

The Average Annual Return of a project, calculated by dividing the total return by the number of years.

Accepted

Recognized as valid, suitable, or conforming to a standard or requirement.