Solution-Constant payout and retention ratios

Constant payout and retention ratios

Reference no: EM133121561

For a firm with a constant payout and retention (plow back) ratios, the dividend growth rate can be estimated as:

Return on retained earnings x Retention ratio.
Return on equity x (1 + Retention ratio).
Payout ratio x Return on assets.
Return on assets x Retention ratio.
Payout ratio x Return on equity.

Reference no: EM133121561

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Constant payout and retention ratios

Reference no: EM133121561

Reference no: EM133121561

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