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2. Fortis reports $50M in equity and $25M in debt and forecasts $8M in net income for the year. It currently pays dividends equal to
2. Fortis reports $50M in equity and $25M in debt and forecasts $8M in net income for the year. It currently pays dividends equal to 10% of its net income. There is a potential change in payout policy-an increase in dividends to 15% of net income. How would this change affect your internal and sustainable growth rates? Determine ROA, ROE, old and new retention rate, and both old and new internal and sustainable growth rates
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