Dividend growth equation / sustainable growth rate g = ROE x retention ratio. The retention ratio (b) is the recovery or retention of earnings, which is sometimes referred to as bo B. Therefore, g = ROE x B. In 2010, Jones Corporation reports EPS of $5.75, ROE is equal to 15% and the company has a dividend payout ratio of 60%. Calculate the dividend growth rate.

Answer rating: 100% (QA)

ANSWER IS To calculate the dividend growth rate we need to fir... View the full answer