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The Crash Davis Driving School has an ROE of 13.3 percent and a payout ratio of 32 percent. What is its sustainable growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Respuesta :

cancinodavidq

Answer:

9.94%(Approx).

Explanation:

Retention ratio=1- payout ratio

=1-0.32

=0.68

Sustainable growth rate=(ROE*Retention ratio)/[1-(ROE*Retention ratio)]

=(0.133*0.68)/[1-(0.133*0.68)]

=0.09044/0.90956

=9.94%(Approx).

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