Question: Thomas Inc s return on equity is 13 percent and management

Thomas, Inc.’s return on equity is 13 percent and management has plans to retain 20 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 35 percent or (ii) decreased retention to 13 percent?


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  • CreatedOctober 31, 2014
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