Question I need help with (answered last question for context to this one) : If Fab Corp can earn 12% after tax on new investments, estimate how fast its net income can grow annually in the future. (Your answer should be a % carried to one place.)
Question I need help with (answered last question for context to this one) : If Fab Corp can earn 12% after tax on new investments, estimate how fast its net income can grow annually in the future. (Your answer should be a % carried to one place.)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
- Fab Corp had net income of $5.42/share last year, and it paid $2.04/share in dividends last year. A) What was its Dividend Payout Ratio last year? B) What was its Retention Rate last year? (Your answers should be a % carried to one place.)
Dividend Payout Ratio = Dividends per share/Earnings per share x 100%
= 2.04/5.42
= 0.37638376
= 37.64%
Retention Rate: 1 – Dividend per share
= 1-37.64%
=52.36%
Question I need help with (answered last question for context to this one) :
- If Fab Corp can earn 12% after tax on new investments, estimate how fast its net income can grow annually in the future. (Your answer should be a % carried to one place.)
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