CFA Practice Question

There are 96 practice questions for this study session.

CFA Practice Question

Which of the following will increase a company's sustainable growth rate of earnings?

A. increasing its dividend payout ratio.
B. increasing its return on equity.
C. decreasing its retention rate.
Correct Answer: B

The sustainable growth rate can be computed as the product of ROE and 1 minus the dividend payout ratio.

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