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%.

Name: 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%.
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Question

Quizplus · Accepted Answer

The growth rate can be calculated using the formula: Growth Rate = (1 - Dividend Payout Ratio) * Return on Equity. Here, it is (1 - 0.60) * 14% = 0.40 * 14% = 5.6%.

A Firm Has a Return on Equity of 14% and a Dividend-Payout