A Firm Has ROA of 18%,ROE of 25%,and a Retention

question 61

Multiple Choice

A firm has ROA of 18%,ROE of 25%,and a retention rate of 60%.What is the firm's sustainable growth rate?

• A)40%
• B)7.2%
• C)10%
• D)15%
• E)10.8%

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Definitions:

Securities and Exchange Commission

The Securities and Exchange Commission (SEC) is a U.S. federal agency responsible for regulating the securities markets, enforcing securities laws, and protecting investors.

State Regulatory Agency

A governmental agency at the state level responsible for the oversight, regulation, and enforcement of specific laws within various sectors, including finance, health, and utilities.

Dodd-Frank Act

A comprehensive set of financial regulations passed in 2010 in the United States, aimed at preventing the recurrence of financial crises by increasing transparency and accountability in the financial system.

Financial Companies

Businesses that provide financial services to commercial and retail customers, such as banks, investment companies, insurers, and loan providers.