A publicly traded technology company has the following financial characteristics: Earnings per share (EPS) = $3.75 • Dividend per share = $0.75 Return on Equity (ROE) = 15% Price-to-Earnings (PE) Ratio = 16 Calculate the company's sustainable growth rate. Select the correct answer: a. 9.00% b. 12.00% c. 15.00% d. 6.00%

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter7: Analysis Of Financial Statements
Section: Chapter Questions
Problem 6P
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Financial accounting

A publicly traded technology company has the following financial characteristics:
Earnings per share (EPS) = $3.75
•
Dividend per share = $0.75
Return on Equity (ROE) = 15%
Price-to-Earnings (PE) Ratio = 16
Calculate the company's sustainable growth rate. Select the correct answer:
a. 9.00%
b. 12.00%
c. 15.00%
d. 6.00%
Transcribed Image Text:A publicly traded technology company has the following financial characteristics: Earnings per share (EPS) = $3.75 • Dividend per share = $0.75 Return on Equity (ROE) = 15% Price-to-Earnings (PE) Ratio = 16 Calculate the company's sustainable growth rate. Select the correct answer: a. 9.00% b. 12.00% c. 15.00% d. 6.00%
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