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Helen [10]
3 years ago
7

Brevik Builders has an expected ROE of 25%. Its dividend growth rate will be __________ if it follows a policy of paying 30% of

earnings in the form of dividends. A. 5% B. 15% C. 17.5% D. 45%
Business
1 answer:
Tems11 [23]3 years ago
6 0

Answer: C. 17.5%

Explanation:

The Return on Equity can be calculated by the formula;

ROE = Growth rate / (1 - dividend payout ratio)

25% = Growth rate / ( 1 - 30%)

Growth rate = 25% * 70%

Growth rate = 17.5%

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An investment advisory firm does its own research, using a group of dedicated employees and has a separate staff of investment a
katen-ka-za [31]

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4 0
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uranmaximum [27]

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