Asked by Joleecia Gresham on Apr 25, 2024
A firm has a return on equity of 14% and a dividend-payout ratio of 60%. The firm's anticipated growth rate is
A) 5.6%.
B) 10%.
C) 14%.
D) 20%.
Dividend-payout Ratio
A financial ratio that shows the percentage of a company's earnings that is paid out to shareholders as dividends.
Anticipated Growth Rate
An expectation of the rate at which a company, asset, or economy will grow in a future period, often used in investment analysis.
- Ascertain the forecasted expansion rate of an enterprise through the analysis of its Return on Equity (ROE) and the fraction of profits distributed as dividends.
Learning Objectives
- Ascertain the forecasted expansion rate of an enterprise through the analysis of its Return on Equity (ROE) and the fraction of profits distributed as dividends.