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please show steps 1. Suppose that a bank wants to grow during the next year but does not want to issue any new external capital.
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1. Suppose that a bank wants to grow during the next year but does not want to issue any new external capital. Its current financial plan projects a ROA of 1.25%, a dividend payout rate of 35%, and an equity-to-asset ratio of 8%. a. Calculate the allowable growth in the bank's assets supposed by these projections. b. What growth rate could be supposed if the bank issued additional common stock equal to 1% of bank assets, with the same earnings projectionsStep by Step Solution
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