Thomas incs return on equity is 11 percent and management


Question: Thomas, Inc.'s return on equity is 11 percent and management has plans to retain 24 percent of earnings for investment in the company.

a. What will be the company's growth rate?

b. How would the growth rate change if management

(i) increased retained earnings to 34 percent or

(ii) decreased retention to12 percent?

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Finance Basics: Thomas incs return on equity is 11 percent and management
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