The Parodies Corp

question 52

Multiple Choice

The Parodies Corp.has a 22 percent return on equity and a 23 percent payout ratio.What is its sustainable growth rate?

• A)18.68 percent
• B)19.25 percent
• C)19.49 percent
• D)20.39 percent
• E)22.00 percent

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Definitions:

Employee Retirement Income Security Act (ERISA)

A federal law that sets minimum standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in these plans.

Mandated Benefit

Benefits that employers are required by law to provide to their employees, such as social security, unemployment, and workers' compensation.

Workers' Compensation

An insurance type that offers medical benefits and compensates for lost wages to workers hurt while performing their job duties.

Nonmandated Benefits

Refer to additional perks or compensations provided by employers that are not legally required, such as retirement plans, health insurance beyond the legal minimum, and paid vacation.