Use the Following Information for Questions

question 5

Multiple Choice

Use the following information for questions
A bank currently just meets its total capital requirements of 8%. The bank currently has a dividend payout ratio of 35%. Assets are expected to grow at 5%.
-What is the required ROA to support the growth in assets?

• A) 0.62%
• B) 0.65%
• C) 0.68%
• D) 0.72%
• E) 0.75%

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Definitions:

Gasoline

A combustible fluid obtained from petroleum, primarily utilized as a fuel in engines that operate through internal combustion.

Cost Function

An equation that calculates the total cost of production based on the quantities of inputs used.

Output

The total amount of goods or services produced by a company or a production process.

Cost Function

A mathematical relationship that describes how the costs incurred by a firm change with various levels of output.