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Pepsi [2]
3 years ago
6

Wilt's has earnings per share of $3.98 and dividends per share of $1.35. What is the firm's sustainable rate of growth if its re

turn on assets is 14.6% and its return on equity is 12.2%?
Business
1 answer:
sasho [114]3 years ago
3 0

Answer: 8.05%

Explanation:

Given that,

Earnings per share (EPS) = $3.98

Dividends per share(DPS) = $1.35

Return on assets(ROA) = 14.6%

Return on equity(ROE) = 12.2%

Plowback Ratio = \frac{EPS - DPS}{EPS}

                          = \frac{3.98 - 1.35}{3.98}

                          = 0.66

Therefore,

sustainable rate of growth = ROE × Plowback Ratio

                                            = 12.2% × 0.66

                                            = 0.0805

                                            = 8.05%

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Simply we added the estimated building cost and the appraised cost of the lot so that the initial cash flow amount can come.

All other information which is given is not relevant. Hence, ignored it

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7 0
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Tatiana [17]
B is the answer I think
3 0
3 years ago
Which one is a disadvantage of the process structure? *
Westkost [7]

Answer: Add and delete divisions

Explanation:

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