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( Measuring growth ) Given that a firm's return on equity is 1 9 percent and management plans to retain 4 3 percent of earnings

(

Measuring growth

)

Given that a firm's return on equity is

19

percent and management plans to retain

43

percent of earnings for investment purposes, what will be the firm's growth rate? If the firm decides to

increase its retention rate, what will happen to the value of its common stock?

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