QUESTION $3$

Folsom Construction reported plans to pay out $60\%$ of its earnings as cash dividends to its shareholders. The firm will finance investment with retained earnings. Its recent return on equity $($ROE$)$ is $0\mathrm{.}20,$ a figure that is expected to continue in the future. What will be the rate of growth of the firm's earnings over the year.

A$.$

$8\mathrm{.}00\%$

B$.$

$12\mathrm{.}00\%$

C$.$

$7\mathrm{.}69\%$

D$.$

$10\mathrm{.}76\%$

E$.$

$9\mathrm{.}90\%$