An all-equity-financed firm plans to grow at an annual rate of at least 10%. Its return on

Question:

An all-equity-financed firm plans to grow at an annual rate of at least 10%. Its return on equity is 18%. What is the maximum possible dividend payout rate the firm an maintain without resorting to additional equity issues?

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...