Asked by
Melissa Morici
on Dec 08, 2024Verified
Turtle Corp has an expected ROE of 10%. The dividend growth rate will be ________ if the firm follows a policy of paying 40% of earnings in the form of dividends.
A) 6.0%
B) 4.8%
C) 7.2%
D) 3.0%
ROE
Return on Equity (ROE) is a financial ratio that measures a company's ability to generate profits from its shareholders' equity.
Dividend Growth Rate
The rate at which a company's dividend payments to shareholders increase over time.
Earnings
The amount of profit that a company produces during a specific period, which is often used to gauge the company's financial performance.
- Understand the impact of dividend policy on dividend growth rate and firm valuation.
Verified Answer
DM
Learning Objectives
- Understand the impact of dividend policy on dividend growth rate and firm valuation.