A firm projects net income to be $500,000, intends to pay out $125,000 in dividends, and had $2 million of equity at the beginning of the year. The firm's sustainable growth rate is:
A) 5%
B) 18.75%
C) 6.25%
D) 4.69%
E) none of the above

Question

Quizplus · Accepted Answer

The Answer of A firm projects net income to be $500,000, intends to pay out $125,000 in dividends, and had $2 million of equity at the beginning of the year. The firm's sustainable growth rate is:
A) 5%
B) 18.75%
C) 6.25%
D) 4.69%
E) none of the above

A Firm Projects Net Income to Be $500,000, Intends to Pay