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Gold corp. has an roe of 8 percent and a payout ratio of 16 percent. what is its sustainable growth rate?

Answer :

tutorconsortium344

Hence the sustainable growth rate is 6.72%

Given:

ROE= 8%

PAYOUT RATION= 16%

Sustainable Growth Rate:

SGR= ROE×(1−PayoutRatio)

Substituting the values we have:

SGR= 8%×(1−0.16)

SGR = 6.72%

Hence the sustainable growth rate is 6.72%

#SPJ4

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