Q416
Retention ratio is 0.55 and return on equity is 12.5% then growth retention model would be
A.
11.95%
B.
6.88%
AnswerC.
13.05%
D.
22.72%
Answer: Option B
Solution
Answer: Option B
Solution:
Growth retention model = Return on equity × Retention ratio = 12.5% × 0.55 = 6.88%