CORPORATE FINANCE
CORPORATE FINANCE
12th Edition
ISBN: 9781307702804
Author: Ross
Publisher: MCG/CREATE
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Chapter 9, Problem 9QAP

Growth Rate The newspaper reported last week that Bennington Enterprises earned $ 17.5 million this year. The report also stated that the firm’s return on equity is 13 percent. The firm retains 80 percent of its earnings. What is the firm’s earnings growth rate? What will next year’s earnings be?

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The newspaper reported last week that Chen Enterprises earned $34.03 million this year. The report also stated that the firm’s return on equity is 12 percent. The firm retains 80 percent of its earnings.    a. What is the firm's earnings growth rate?  b. What will next year's earnings be?
Please answer this question: ABC Corporation has earnings of $2 million. It planned to payout dividends of $1.2 million to shareholders. The company has a historical return on equity of 16%. What is the firm growth rate on earning next year? What is the firm growth in dollars?
(Measuring growth) Given that a firm's return on equity is 22 percent and management plans to retain 35 percent of earnings for investment purposes, what will be the firm's growth rate? The firm's growth rate will be %. (Round to two decimal places.)

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CORPORATE FINANCE

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