Answers
Expected Book Value of Equity = $ 8027500 and Expevted Net Income = $ 1025700
Return on Equity = (1025700 / 8027500) x 100 ~ 12.77 %
Net Income = $ 1027500 and Dividend Payout Ratio = 32.5 %
Retention Ratio = (100 - 32.5) = 67.5 % or 0.675
Sustainable Growth Rate = Retention Ratio x ROE = 0.675 x 12.77 ~ 8.6247 % or 8.62 %
Growth is as is observed above is equal to the product of the retention ratio and the ROE. Hence, growth is dependent directly on the retention ratio which is nothing but the amount of earning that is retained and reinvested in a business. Dividend Growth is directly related to earnings growth and is infact both are equal. Higher dividend payments imply higher dividend payout ratio and lower retention ratio, thereby leading to lower and not higher growth. Hence, statement 1 is the correct option.
.Similar Solved Questions
1 answer
Find the area of the shaded region enclosed in a semicircle of diameter 9 centimeters. The...
Find the area of the shaded region enclosed in a semicircle of diameter 9 centimeters. The length of the chord AB is 8 centimeters. [Hint: Triangle ABC is a right triangle.] The area is approximately square centimeters (Do not round until the final answer. Then round to two decimal places as needed....
1 answer
What is the cross product a x b of the two vectors a = 64.00 m directed due east and b = 32.00 m directed 30° north of east
What is the cross product a x b of the two vectors a = 64.00 m directed due east and b = 32.00 m directed 30° north of east?...
1 answer
4. (15 pts) A cratsman builds two kinds of birdhouses, one for wrens and one bluebirds. Each wren birdhouse takes fo...
4. (15 pts) A cratsman builds two kinds of birdhouses, one for wrens and one bluebirds. Each wren birdhouse takes four hours of labor and four units Each bluebird house two tsman has available 60 hours of labor and 120 units of lumber. He does not requires two hours of labor and twelve units of lumb...
1 answer
8 Given the cicurt and CA) Platafǐ(t) ao As 七(3) acrfocs are dischaca ed at t...
8 Given the cicurt and CA) Platafǐ(t) ao As 七(3) acrfocs are dischaca ed at t Find and Plet Ct) fro ts to 2 sec....
1 answer
Please help with question 6. please answer question in table format. thanks for your help. below...
Please help with question 6. please answer question in table format. thanks for your help. below this text is info you might need from previous questions. Thanks again. Also please answer question 7 yes or no. Thank you 6. Next calculate marginal revenue, knowing...
1 answer
Suppose the going price of pizza is $11 per pie, the cost of the ingredients used...
Suppose the going price of pizza is $11 per pie, the cost of the ingredients used to produce pizza is $7, and marginal product of labor is 150 pizzas. What is the value of the marginal product of labor (S)?...
1 answer
The saturation flow rate for an intersection approach is 3600 veh/h. At the beginning of a...
The saturation flow rate for an intersection approach is 3600 veh/h. At the beginning of a cycle (effective red) no vehicles are queued. The signal is timed so that when the queue (from the continuously arriving vehicles) is 13 vehicles long, the effective green begins. If the queue dissipates 8 sec...
1 answer
Connec Ch 15 HW Saved Help 6 Part 4 of 4 1.42 points Required information (The...
Connec Ch 15 HW Saved Help 6 Part 4 of 4 1.42 points Required information (The following information applies to the questions displayed below.) The following information is available for Lock-Tite Company, which produces special-order security products and uses a job order costing system. April 30 M...
1 answer
Hemming Co. reported the following current-year purchases and sales for its only product Units Acquired at...
Hemming Co. reported the following current-year purchases and sales for its only product Units Acquired at Cost 265 units $12.60 3,339 Units Sold at Retail Activities Date Jan. 1 Beginning inventory 225 units $42.60 Jan.10 Sales Mar.14 Purchase 430 units $17.60 7,568 370 units $42.60 Mar.15 Sales Ju...
1 answer
Which signs or symptoms reported by the pregnant woman should be reported to the healthcare provider?...
Which signs or symptoms reported by the pregnant woman should be reported to the healthcare provider? Select all that apply A. Continuous pounding headache B. swelling in ankles and feet C. swelling in face D. frequent burning sensation in the epigastric region E. escape of fluid from the vagiina...
3 answers
Which of the following statements is false
Which of the following statements is false? 1)The velocity of an object can change while maintaining a constant speed. 2)An object that maintains a constant speed must have zero acceleration. 3)An object that has a non-zero acceleration must have a changing velocity. 4)The speed of an object can cha...
2 answers
Which is the true statement:?
Which is the true statement regarding polarity? #"a. Homonuclear diatomic molecules contain a polar bond."# #"b. All heteronuclear diatomic molecules contain a polar bond."# #"c. Differences in electronegativity with respect to the atoms involved in a covalent bond can give rise ...
1 answer
Calculator Cost-Volume-Profit, Margin of Safety Steven Kissick is a Kingston-based lawyer who has been in practice...
Calculator Cost-Volume-Profit, Margin of Safety Steven Kissick is a Kingston-based lawyer who has been in practice for several years. He knew that it would take some time to establish himself and hopefully generate enough revenue to make a decent living. His financial statements for his year ended J...
1 answer
Create a nursing care plan with 3 nursing diagnosis. For one of the diagnosis create a...
Create a nursing care plan with 3 nursing diagnosis. For one of the diagnosis create a short term goal with 5 nursing interventions with rationales and outcome evaluation. 60 y/o Russian Male admitted on 09/10/19 with SOB. Patient medical diagnosis is CHF, Hyperkalemia, Pneumonia. Patient has a h...
1 answer
30. Zoe notices that her soup has some undesirable bacteria growing in it. She takes 1...
30. Zoe notices that her soup has some undesirable bacteria growing in it. She takes 1 ml of the soup and adds 9 ml of water, mixing it well. After repeating this same dilution step one more time, she spreads 50 μ1 of the last mixture on several agar plates to grow the bacteria. The next day, she...
1 answer
During the course of wrapping up the 2017 audit of your firm’s client, Best Appliances, Inc., you discover the following...
During the course of wrapping up the 2017 audit of your firm’s client, Best Appliances, Inc., you discover the following sales activity that occurred in late December 2017. Best Appliances has recorded sales for 275,000 appliances for the month of December. This amount is...
1 answer
Ms. Ray is age 46 and single. Her employer made a $2,430 contribution to her qualified...
Ms. Ray is age 46 and single. Her employer made a $2,430 contribution to her qualified profit-sharing plan account, and she made the maximum contribution to her traditional IRA. Required: Compute her IRA deduction if Ms. Ray’s $50,800 salary is her only income item. Compute her IRA deduction ...