SlideShare a Scribd company logo
1 of 1
Download to read offline
Primary Colors has a debt-equity ratio of .48, a return on assets of 13.6 percent, and a dividend
payout ratio of 30 percent. What is the firm's rate of growth?
Solution
ROE= Return on asset = (1+ D/E ratio)
= 13.60% x (1+0.48)
= 20.13%
Growth rate g = ROE x (1- payout ratio)
= 20.13% x (1- 0.30)
= 14.09%

More Related Content

More from ajanthakadhar

Private four year college enrollment a random sample of enrolment i.pdf
Private four year college enrollment  a random sample of enrolment i.pdfPrivate four year college enrollment  a random sample of enrolment i.pdf
Private four year college enrollment a random sample of enrolment i.pdfajanthakadhar
 
Princple theory of management1 .. where does the Coast Guard fit i.pdf
Princple theory of management1 .. where does the Coast Guard fit i.pdfPrincple theory of management1 .. where does the Coast Guard fit i.pdf
Princple theory of management1 .. where does the Coast Guard fit i.pdfajanthakadhar
 
Principles of Microeconomics (ECON 2302)Social Responsibility    .pdf
Principles of Microeconomics (ECON 2302)Social Responsibility    .pdfPrinciples of Microeconomics (ECON 2302)Social Responsibility    .pdf
Principles of Microeconomics (ECON 2302)Social Responsibility    .pdfajanthakadhar
 
Pretty much since 1976 (the passage of Hart-Scott-Rodino Act) US ant.pdf
Pretty much since 1976 (the passage of Hart-Scott-Rodino Act) US ant.pdfPretty much since 1976 (the passage of Hart-Scott-Rodino Act) US ant.pdf
Pretty much since 1976 (the passage of Hart-Scott-Rodino Act) US ant.pdfajanthakadhar
 
Presidential Abraham Lincoln signed a bill on July 1, 1862 to author.pdf
Presidential Abraham Lincoln signed a bill on July 1, 1862 to author.pdfPresidential Abraham Lincoln signed a bill on July 1, 1862 to author.pdf
Presidential Abraham Lincoln signed a bill on July 1, 1862 to author.pdfajanthakadhar
 
Prepare statement of cash flows using the direct and indirect method.pdf
Prepare statement of cash flows using the direct and indirect method.pdfPrepare statement of cash flows using the direct and indirect method.pdf
Prepare statement of cash flows using the direct and indirect method.pdfajanthakadhar
 
preform the indicated operation and express the results in rectangul.pdf
preform the indicated operation and express the results in rectangul.pdfpreform the indicated operation and express the results in rectangul.pdf
preform the indicated operation and express the results in rectangul.pdfajanthakadhar
 
Potter Plumbing has a beginning balance in inventory of 400 units at.pdf
Potter Plumbing has a beginning balance in inventory of 400 units at.pdfPotter Plumbing has a beginning balance in inventory of 400 units at.pdf
Potter Plumbing has a beginning balance in inventory of 400 units at.pdfajanthakadhar
 
Power is an aspect of a relationship between two or more perons. Wha.pdf
Power is an aspect of a relationship between two or more perons. Wha.pdfPower is an aspect of a relationship between two or more perons. Wha.pdf
Power is an aspect of a relationship between two or more perons. Wha.pdfajanthakadhar
 
Precalc question about carbon datingA wooden artifact recovered fr.pdf
Precalc question about carbon datingA wooden artifact recovered fr.pdfPrecalc question about carbon datingA wooden artifact recovered fr.pdf
Precalc question about carbon datingA wooden artifact recovered fr.pdfajanthakadhar
 
Preferred stock dividends __________ earnings available to common st.pdf
Preferred stock dividends __________ earnings available to common st.pdfPreferred stock dividends __________ earnings available to common st.pdf
Preferred stock dividends __________ earnings available to common st.pdfajanthakadhar
 
Possible security threats inherent in a local-area network (LAN) env.pdf
Possible security threats inherent in a local-area network (LAN) env.pdfPossible security threats inherent in a local-area network (LAN) env.pdf
Possible security threats inherent in a local-area network (LAN) env.pdfajanthakadhar
 
Posted 1712 documents to computer with 5 errors. What is my accuracy.pdf
Posted 1712 documents to computer with 5 errors. What is my accuracy.pdfPosted 1712 documents to computer with 5 errors. What is my accuracy.pdf
Posted 1712 documents to computer with 5 errors. What is my accuracy.pdfajanthakadhar
 

More from ajanthakadhar (13)

Private four year college enrollment a random sample of enrolment i.pdf
Private four year college enrollment  a random sample of enrolment i.pdfPrivate four year college enrollment  a random sample of enrolment i.pdf
Private four year college enrollment a random sample of enrolment i.pdf
 
Princple theory of management1 .. where does the Coast Guard fit i.pdf
Princple theory of management1 .. where does the Coast Guard fit i.pdfPrincple theory of management1 .. where does the Coast Guard fit i.pdf
Princple theory of management1 .. where does the Coast Guard fit i.pdf
 
Principles of Microeconomics (ECON 2302)Social Responsibility    .pdf
Principles of Microeconomics (ECON 2302)Social Responsibility    .pdfPrinciples of Microeconomics (ECON 2302)Social Responsibility    .pdf
Principles of Microeconomics (ECON 2302)Social Responsibility    .pdf
 
Pretty much since 1976 (the passage of Hart-Scott-Rodino Act) US ant.pdf
Pretty much since 1976 (the passage of Hart-Scott-Rodino Act) US ant.pdfPretty much since 1976 (the passage of Hart-Scott-Rodino Act) US ant.pdf
Pretty much since 1976 (the passage of Hart-Scott-Rodino Act) US ant.pdf
 
Presidential Abraham Lincoln signed a bill on July 1, 1862 to author.pdf
Presidential Abraham Lincoln signed a bill on July 1, 1862 to author.pdfPresidential Abraham Lincoln signed a bill on July 1, 1862 to author.pdf
Presidential Abraham Lincoln signed a bill on July 1, 1862 to author.pdf
 
Prepare statement of cash flows using the direct and indirect method.pdf
Prepare statement of cash flows using the direct and indirect method.pdfPrepare statement of cash flows using the direct and indirect method.pdf
Prepare statement of cash flows using the direct and indirect method.pdf
 
preform the indicated operation and express the results in rectangul.pdf
preform the indicated operation and express the results in rectangul.pdfpreform the indicated operation and express the results in rectangul.pdf
preform the indicated operation and express the results in rectangul.pdf
 
Potter Plumbing has a beginning balance in inventory of 400 units at.pdf
Potter Plumbing has a beginning balance in inventory of 400 units at.pdfPotter Plumbing has a beginning balance in inventory of 400 units at.pdf
Potter Plumbing has a beginning balance in inventory of 400 units at.pdf
 
Power is an aspect of a relationship between two or more perons. Wha.pdf
Power is an aspect of a relationship between two or more perons. Wha.pdfPower is an aspect of a relationship between two or more perons. Wha.pdf
Power is an aspect of a relationship between two or more perons. Wha.pdf
 
Precalc question about carbon datingA wooden artifact recovered fr.pdf
Precalc question about carbon datingA wooden artifact recovered fr.pdfPrecalc question about carbon datingA wooden artifact recovered fr.pdf
Precalc question about carbon datingA wooden artifact recovered fr.pdf
 
Preferred stock dividends __________ earnings available to common st.pdf
Preferred stock dividends __________ earnings available to common st.pdfPreferred stock dividends __________ earnings available to common st.pdf
Preferred stock dividends __________ earnings available to common st.pdf
 
Possible security threats inherent in a local-area network (LAN) env.pdf
Possible security threats inherent in a local-area network (LAN) env.pdfPossible security threats inherent in a local-area network (LAN) env.pdf
Possible security threats inherent in a local-area network (LAN) env.pdf
 
Posted 1712 documents to computer with 5 errors. What is my accuracy.pdf
Posted 1712 documents to computer with 5 errors. What is my accuracy.pdfPosted 1712 documents to computer with 5 errors. What is my accuracy.pdf
Posted 1712 documents to computer with 5 errors. What is my accuracy.pdf
 

Recently uploaded

The basics of sentences session 2pptx copy.pptx
The basics of sentences session 2pptx copy.pptxThe basics of sentences session 2pptx copy.pptx
The basics of sentences session 2pptx copy.pptxheathfieldcps1
 
Call Girls in Dwarka Mor Delhi Contact Us 9654467111
Call Girls in Dwarka Mor Delhi Contact Us 9654467111Call Girls in Dwarka Mor Delhi Contact Us 9654467111
Call Girls in Dwarka Mor Delhi Contact Us 9654467111Sapana Sha
 
microwave assisted reaction. General introduction
microwave assisted reaction. General introductionmicrowave assisted reaction. General introduction
microwave assisted reaction. General introductionMaksud Ahmed
 
Ecosystem Interactions Class Discussion Presentation in Blue Green Lined Styl...
Ecosystem Interactions Class Discussion Presentation in Blue Green Lined Styl...Ecosystem Interactions Class Discussion Presentation in Blue Green Lined Styl...
Ecosystem Interactions Class Discussion Presentation in Blue Green Lined Styl...fonyou31
 
Separation of Lanthanides/ Lanthanides and Actinides
Separation of Lanthanides/ Lanthanides and ActinidesSeparation of Lanthanides/ Lanthanides and Actinides
Separation of Lanthanides/ Lanthanides and ActinidesFatimaKhan178732
 
mini mental status format.docx
mini    mental       status     format.docxmini    mental       status     format.docx
mini mental status format.docxPoojaSen20
 
SOCIAL AND HISTORICAL CONTEXT - LFTVD.pptx
SOCIAL AND HISTORICAL CONTEXT - LFTVD.pptxSOCIAL AND HISTORICAL CONTEXT - LFTVD.pptx
SOCIAL AND HISTORICAL CONTEXT - LFTVD.pptxiammrhaywood
 
Software Engineering Methodologies (overview)
Software Engineering Methodologies (overview)Software Engineering Methodologies (overview)
Software Engineering Methodologies (overview)eniolaolutunde
 
Disha NEET Physics Guide for classes 11 and 12.pdf
Disha NEET Physics Guide for classes 11 and 12.pdfDisha NEET Physics Guide for classes 11 and 12.pdf
Disha NEET Physics Guide for classes 11 and 12.pdfchloefrazer622
 
Activity 01 - Artificial Culture (1).pdf
Activity 01 - Artificial Culture (1).pdfActivity 01 - Artificial Culture (1).pdf
Activity 01 - Artificial Culture (1).pdfciinovamais
 
Q4-W6-Restating Informational Text Grade 3
Q4-W6-Restating Informational Text Grade 3Q4-W6-Restating Informational Text Grade 3
Q4-W6-Restating Informational Text Grade 3JemimahLaneBuaron
 
Student login on Anyboli platform.helpin
Student login on Anyboli platform.helpinStudent login on Anyboli platform.helpin
Student login on Anyboli platform.helpinRaunakKeshri1
 
Mastering the Unannounced Regulatory Inspection
Mastering the Unannounced Regulatory InspectionMastering the Unannounced Regulatory Inspection
Mastering the Unannounced Regulatory InspectionSafetyChain Software
 
Organic Name Reactions for the students and aspirants of Chemistry12th.pptx
Organic Name Reactions  for the students and aspirants of Chemistry12th.pptxOrganic Name Reactions  for the students and aspirants of Chemistry12th.pptx
Organic Name Reactions for the students and aspirants of Chemistry12th.pptxVS Mahajan Coaching Centre
 
POINT- BIOCHEMISTRY SEM 2 ENZYMES UNIT 5.pptx
POINT- BIOCHEMISTRY SEM 2 ENZYMES UNIT 5.pptxPOINT- BIOCHEMISTRY SEM 2 ENZYMES UNIT 5.pptx
POINT- BIOCHEMISTRY SEM 2 ENZYMES UNIT 5.pptxSayali Powar
 
A Critique of the Proposed National Education Policy Reform
A Critique of the Proposed National Education Policy ReformA Critique of the Proposed National Education Policy Reform
A Critique of the Proposed National Education Policy ReformChameera Dedduwage
 
9548086042 for call girls in Indira Nagar with room service
9548086042  for call girls in Indira Nagar  with room service9548086042  for call girls in Indira Nagar  with room service
9548086042 for call girls in Indira Nagar with room servicediscovermytutordmt
 
Nutritional Needs Presentation - HLTH 104
Nutritional Needs Presentation - HLTH 104Nutritional Needs Presentation - HLTH 104
Nutritional Needs Presentation - HLTH 104misteraugie
 
The Most Excellent Way | 1 Corinthians 13
The Most Excellent Way | 1 Corinthians 13The Most Excellent Way | 1 Corinthians 13
The Most Excellent Way | 1 Corinthians 13Steve Thomason
 
Paris 2024 Olympic Geographies - an activity
Paris 2024 Olympic Geographies - an activityParis 2024 Olympic Geographies - an activity
Paris 2024 Olympic Geographies - an activityGeoBlogs
 

Recently uploaded (20)

The basics of sentences session 2pptx copy.pptx
The basics of sentences session 2pptx copy.pptxThe basics of sentences session 2pptx copy.pptx
The basics of sentences session 2pptx copy.pptx
 
Call Girls in Dwarka Mor Delhi Contact Us 9654467111
Call Girls in Dwarka Mor Delhi Contact Us 9654467111Call Girls in Dwarka Mor Delhi Contact Us 9654467111
Call Girls in Dwarka Mor Delhi Contact Us 9654467111
 
microwave assisted reaction. General introduction
microwave assisted reaction. General introductionmicrowave assisted reaction. General introduction
microwave assisted reaction. General introduction
 
Ecosystem Interactions Class Discussion Presentation in Blue Green Lined Styl...
Ecosystem Interactions Class Discussion Presentation in Blue Green Lined Styl...Ecosystem Interactions Class Discussion Presentation in Blue Green Lined Styl...
Ecosystem Interactions Class Discussion Presentation in Blue Green Lined Styl...
 
Separation of Lanthanides/ Lanthanides and Actinides
Separation of Lanthanides/ Lanthanides and ActinidesSeparation of Lanthanides/ Lanthanides and Actinides
Separation of Lanthanides/ Lanthanides and Actinides
 
mini mental status format.docx
mini    mental       status     format.docxmini    mental       status     format.docx
mini mental status format.docx
 
SOCIAL AND HISTORICAL CONTEXT - LFTVD.pptx
SOCIAL AND HISTORICAL CONTEXT - LFTVD.pptxSOCIAL AND HISTORICAL CONTEXT - LFTVD.pptx
SOCIAL AND HISTORICAL CONTEXT - LFTVD.pptx
 
Software Engineering Methodologies (overview)
Software Engineering Methodologies (overview)Software Engineering Methodologies (overview)
Software Engineering Methodologies (overview)
 
Disha NEET Physics Guide for classes 11 and 12.pdf
Disha NEET Physics Guide for classes 11 and 12.pdfDisha NEET Physics Guide for classes 11 and 12.pdf
Disha NEET Physics Guide for classes 11 and 12.pdf
 
Activity 01 - Artificial Culture (1).pdf
Activity 01 - Artificial Culture (1).pdfActivity 01 - Artificial Culture (1).pdf
Activity 01 - Artificial Culture (1).pdf
 
Q4-W6-Restating Informational Text Grade 3
Q4-W6-Restating Informational Text Grade 3Q4-W6-Restating Informational Text Grade 3
Q4-W6-Restating Informational Text Grade 3
 
Student login on Anyboli platform.helpin
Student login on Anyboli platform.helpinStudent login on Anyboli platform.helpin
Student login on Anyboli platform.helpin
 
Mastering the Unannounced Regulatory Inspection
Mastering the Unannounced Regulatory InspectionMastering the Unannounced Regulatory Inspection
Mastering the Unannounced Regulatory Inspection
 
Organic Name Reactions for the students and aspirants of Chemistry12th.pptx
Organic Name Reactions  for the students and aspirants of Chemistry12th.pptxOrganic Name Reactions  for the students and aspirants of Chemistry12th.pptx
Organic Name Reactions for the students and aspirants of Chemistry12th.pptx
 
POINT- BIOCHEMISTRY SEM 2 ENZYMES UNIT 5.pptx
POINT- BIOCHEMISTRY SEM 2 ENZYMES UNIT 5.pptxPOINT- BIOCHEMISTRY SEM 2 ENZYMES UNIT 5.pptx
POINT- BIOCHEMISTRY SEM 2 ENZYMES UNIT 5.pptx
 
A Critique of the Proposed National Education Policy Reform
A Critique of the Proposed National Education Policy ReformA Critique of the Proposed National Education Policy Reform
A Critique of the Proposed National Education Policy Reform
 
9548086042 for call girls in Indira Nagar with room service
9548086042  for call girls in Indira Nagar  with room service9548086042  for call girls in Indira Nagar  with room service
9548086042 for call girls in Indira Nagar with room service
 
Nutritional Needs Presentation - HLTH 104
Nutritional Needs Presentation - HLTH 104Nutritional Needs Presentation - HLTH 104
Nutritional Needs Presentation - HLTH 104
 
The Most Excellent Way | 1 Corinthians 13
The Most Excellent Way | 1 Corinthians 13The Most Excellent Way | 1 Corinthians 13
The Most Excellent Way | 1 Corinthians 13
 
Paris 2024 Olympic Geographies - an activity
Paris 2024 Olympic Geographies - an activityParis 2024 Olympic Geographies - an activity
Paris 2024 Olympic Geographies - an activity
 

Primary Colors has a debt-equity ratio of .48, a return on assets of.pdf

  • 1. Primary Colors has a debt-equity ratio of .48, a return on assets of 13.6 percent, and a dividend payout ratio of 30 percent. What is the firm's rate of growth? Solution ROE= Return on asset = (1+ D/E ratio) = 13.60% x (1+0.48) = 20.13% Growth rate g = ROE x (1- payout ratio) = 20.13% x (1- 0.30) = 14.09%