Question
A firm is financing its growth with retained earnings. It is retaining 80 percent of its annual earnings. The firm's historic return on equity is
A firm is financing its growth with retained earnings. It is retaining 80 percent of its annual earnings. The firm's historic return on equity is 16 percent, a figure that is expected to continue into the future. How much will earnings grow over the year?
A. 16%
B. 3.2%
C. 21.4%
D. 12.8%
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The Dark Side Of Valuation
Authors: Aswath Damodaran
3rd Edition
0134854101, 9780134854106
