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Given the balance sheet( with equity,net income, dividends,assets etc) the ROE in the exercise was calculated by computing the following ratio DIVIDENDS/EQUITY. Can someone please
Given the balance sheet( with equity,net income, dividends,assets etc) the ROE in the exercise was calculated by computing the following ratio DIVIDENDS/EQUITY. Can someone please explain to me how this ratio has been derived ( I thought it could be related to growth ratio and payout).
In the exercise the net income is 37.5 and dividends 18.75 . As your collegue answered it could be that net income= dividends when it is totally paid out but in this case i get two different results if i do 37.5/44 or 18.75/44.
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