What portion of earnings is being payed out in dividends if the sustainable growth rate is...
What portion of earnings is being payed out in dividends if the sustainable growth rate is 7.5% and the firm’s ROE is 24%? Enter your answer as a percentage rounded to two decimal places (e.g., 5.64%).
Homework Answers
Sustainable Growth Rate = (1 - Dividend Payout Ratio)(ROE)
Here,
Sustainable Growth Rate = 7.5%
ROE = 24%
Dividend Payout Ratio = 1 - (0.075/0.24)
Dividend Payout Ratio = 68.75%
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