Multiple Choice
Which of the following is not necessarily true for a firm with a payout ratio of .15 and ROE of 20%?
A) It reinvests 85% of its earnings back into the firm.
B) The firm's retained earnings will increase the book value of equity by 17%.
C) It pays a dividend of 15 cents per share.
D) The firm's earnings and equity will grow by 17% per year.
Correct Answer:
Verified
Correct Answer:
Verified
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