For a Stock Pricing Model,an Analyst Selects 10% as the Sustainable

question 87

Multiple Choice

For a stock pricing model,an analyst selects 10% as the sustainable growth rate in dividends for a firm.Given that the firm pays out 40% of net income as dividends each year,what is the return on shareholder equity for this firm?

• A) 2.50%
• B) 4.00%
• C) 10.00%
• D) 16.67%

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Definitions:

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