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Kendra Inc. is trying to project their long term growth rate. During the year just ended total assets were $200 million dollars, total liabilities were
Kendra Inc. is trying to project their long term growth rate. During the year just ended total assets were $200 million dollars, total liabilities were $150 million dollars and net income was $5 million. There is no preferred stock. Kendra paid $3 million of dividends. Ashley believes that the current year is representative of future proportions for ratios such as ROE and payout ratio. Based on the Earnings Retention model, Kendra forecasts a long-term growth rate of:
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