Primary Colors has a debt-equity ratio of 0.56,a return on assets of 8.2 percent,and a dividend payout ratio of 45 percent.What is the firm's rate of growth?
A)6)04%
B)6)52%
C)8)13%
D)7)04%
E)7)26%

Name: Primary Colors has a debt-equity ratio of 0.56,a return on assets of 8.2 percent,and a dividend payout ratio of 45 percent.What is the firm's rate of growth? A)6)04% B)6)52% C)8)13% D)7)04% E)7)26%
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Question

Quizplus · Accepted Answer

g = (1 − 0.45)× [0.082 × (1 + 0.56)] = 0.0704,or 7.04%

Primary Colors Has a Debt-Equity Ratio of 0