Which of the Following Statements About the Equity Growth Rate

Which of the following statements about the equity growth rate is correct?

I. The higher the ROCE the higher equity growth rate, all other things equal.
II. The higher the dividend payout the higher the equity growth rate.
III. The equity growth rate is unaffected by the cost of debt.
IV. The equity growth rate indicates the expected growth in stock price each period.

A) I, II, III, and IV
B) I, II, and III
C) I and III
D) I only

Correct Answer:

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