Which one of these formulas will provide an estimate of the growth rate of a security's dividends?

Question

Quizplus · Accepted Answer

The retention ratio represents the amount of earnings that are being kept by the company to reinvest in the business rather than being paid out as dividends. The return on equity measures the profitability of the company from the shareholder's perspective. By multiplying the retention ratio by the return on equity, we get an estimate of the growth rate of the company's dividends.

Which One of These Formulas Will Provide an Estimate of the Growth