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A Firm Has $20 Million in Equity and $20 Million

Question 9

Multiple Choice

A firm has $20 million in equity and $20 million of debt, it pays dividends of 20% of net income, and has a net income of $5 million. What is the firm's sustainable growth rate?


A) 18%
B) 19%
C) 20%
D) 21%

Correct Answer:

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