If a company has a return on equity of 25% and wants a growth rate of 10%, how much of ROE should be retained?
A) 40%
B) 50%
C) 60%
D) 70%

Name: If a company has a return on equity of 25% and wants a growth rate of 10%, how much of ROE should be retained? A) 40% B) 50% C) 60% D) 70%
Brand: Quizplus
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Question

Quizplus · Accepted Answer

ROE = (Retained Earnings / Shareholder's Equity) * 100Growth Rate = (Retained Earnings / Shareholder's Equity) * ROE10% = (Retained Earnings / Shareholder's Equity) * 25%Retained Earnings / Shareholder's Equity = 40%

If a Company Has a Return on Equity of 25