(Q. 12 IN B) WHAT PROPORTION OF EARNINGS IS BEING RETAINED BY THE...
17. (Q. 12 in B) What proportion of earnings is being retained by the firm if the
sustainable growth rate is 8 percent and the firm's ROE is 20 percent?
A) 8%
B) 12%
C) 20%
D) 40%
Answer D
8% = 20% × plowback
40% = plowback