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Think Tank Company Has an Expected ROE of 26

Question 69

Multiple Choice

Think Tank Company has an expected ROE of 26%.The dividend growth rate will be _______ if the firm follows a policy of plowing back 90% of earnings.

A) 2.6%
B) 10%
C) 23.4%
D) 90% 26% * 0.90 = 23.4%.

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