If a Firm Pays Out 30% of Its Earnings as Dividends

question 17

Multiple Choice

If a firm pays out 30% of its earnings as dividends and has averaged a 20 percent return on assets, how quickly can the firm grow without needing to secure outside funding sources?

• A)6.4%.
• B)10.2%.
• C)16.3%.
• D)20.0%.
• E)none of the above.

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Definitions:

Thoreau

Henry David Thoreau, a 19th-century American essayist, poet, and philosopher known for his writings on nature and society.

Natural World

The aspects of our environment that are not created or significantly altered by human beings, including plants, animals, and ecosystems.

Land Use

The management and modification of natural environment or wilderness into built environment such as settlements and semi-natural habitats such as arable fields, pastures, and managed woods.

Materialism

A philosophical stance asserting that physical matter is the only or most fundamental reality and that all being and processes can be explained as manifestations or results of matter.