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If a Firm Pays Out 30% of Its Earnings as Dividends

Question 73

Multiple Choice

If a firm pays out 30% of its earnings as dividends and has averaged a 20 percent return on equity, how quickly can the firm grow while maintaining a constant debt to equity mix?


A) 6.4%.
B) 10.2%.
C) 14.3%.
D) 20.0%.
E) none of the above.
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