Net Corp.has an ROE of 30% and would like to see earnings grow at a 18% annual rate.What percent of earnings can they afford to pay out as dividends?
A)45%
B)40%
C)35%
D)30% Growth in earnings = Plowback x ROE
)18 = Plowback x .30
)18/.30 = 60% = Plowback

Question

Quizplus · Accepted Answer

The Answer of Net Corp.has an ROE of 30% and would like to see earnings grow at a 18% annual rate.What percent of earnings can they afford to pay out as dividends?
A)45%
B)40%
C)35%
D)30% Growth in earnings = Plowback x ROE
)18 = Plowback x .30
)18/.30 = 60% = Plowback

Net CorpHas an ROE of 30% and Would Like to See