The ROE for Rosengarten is about 7.3 percent, and the plowback ratio is about 67 percent. If you calculate the sustainable growth rate for Rosengarten, you will find it is only 5.14 percent. In our calculation for EFN, we used a growth rate of 25 percent. Is this possible?

Answer rating: 100% (QA)

Two assumptions of the sustainable growth formula are that the company does not want to sel... View the full answer