a. On the basis of the data shown in Tables 19D and 19E, calculate each of the

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a. On the basis of the data shown in Tables 19D and 19E, calculate each of the five ROE components for Eastover and Southampton in 2023. Using the five components, calculate ROE for both companies.

b. Referring to the components calculated in part (a), explain the difference in ROE for Eastover and Southampton in 2023.

c. Using 2023 data, calculate the sustainable growth rate for both Eastover and Southampton.

Discuss the appropriateness of using these calculations as a basis for estimating future growth.  p-696

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ISE Investments

ISBN: 9781266085963

13th International Edition

Authors: Zvi Bodie, Alex Kane, Alan Marcus

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