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Acme Sports Management has an ROE of 15.7%, a D/E ratio of .75, and sustains a dividend yield of 2.75% with a DPR of 64.6%.

Acme Sports Management has an ROE of 15.7%, a D/E ratio of .75, and sustains a dividend yield of 2.75% with a DPR of 64.6%. If the risk-free rate is 3.25% and the market risk premium is 6.9%, what is the firm's sustainable growth rate?

a)About 5.6%

b)About 10.1% (incorrect)

c)About 18.5

d)None of the above.

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