Question: ( Measuring growth ) Given that a firm s return on equity is 2 0 percent and management plans to retain 7 5 percent of

(Measuring growth) Given that a firms return on equity is 20 percent and management plans to retain 75 percent of earnings to fund investment projects, what will be the firms growth rate? If the firm decides to increase its retention rate, what will happen to the value of its common stock?
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