Suppose a company has a return on assets of 6 percent, total assets of $10 billion, and shareholders' equity of $5 billion. If the company has a dividend payout of 40 percent, the sustainable growth rate is closest to:
A) 2.4 percent.
B) 3.6 percent.
C) 4.8 percent.
D) 7.2 percent.
Correct Answer:
Verified
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