Which of the Following Algebraic Expressions Is the Ploughback Ratio $\times$

question 4

Multiple Choice

Which of the following algebraic expressions is the ploughback ratio? (b is the fraction of earnings retained in the firm and g is the growth rate.)

• A)g = (1 - b)\(\times\) ROE
• B)g = ROE \(\div\) b
• C)g = b \(\times\) ROE
• D)g = (1 + b)\(\times\) ROE

---

Definitions:

Fundamental Analysis

An assessment method for evaluating a security that involves examining related economic, financial, and other qualitative and quantitative factors.

Technical Analysis

A method of evaluating securities by analyzing statistics generated by market activity, such as past prices and volume.

Government Spending

Expenditures by the government on goods and services, including infrastructure projects, welfare, and salaries for government workers.

Demand Shock

A sudden event that significantly alters demand for goods or services, either positively or negatively, in an economy.