If the company’s D/P ratio is 60% & ROI is 16%, what should be the growth rate:a.5%b.7%c.6.40%d.9.60%
Question
Solution 1
The question is asking for the growth rate of a company given its Dividend Payout (D/P) ratio and Return on Investment (ROI).
The Gordon Growth Model is a simple way to calculate the growth rate (g) of a company. The formula is:
g = ROI - (D/P ratio * ROI)
Given that the D/P ratio is 60% (or 0.6 Knowee AI is a powerful AI-powered study tool designed to help you to solve study problem.
Knowee AI is a powerful AI-powered study tool designed to help you to solve study problem.
Knowee AI is a powerful AI-powered study tool designed to help you to solve study problem.
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