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Dividend growth/Sustainable Growth Rate equation g = ROE x Retention Ratio. Retention ratio (b) is the plowback or earnings retention, which is sometimes referred to
Dividend growth/Sustainable Growth Rate equation g = ROE x Retention Ratio. Retention ratio (b) is the plowback or earnings retention, which is sometimes referred to as b or B. Therefore g = ROE x B. In 2010 the Jones Corporation reports EPS of $5.75, ROE equals 15% and the company has a dividend payout ratio of 60%. Calculate the dividend growth rate
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