Last year Macy’s lounge furniture corporation had an ROE of 17.2% and a dividend payout ratio...

Last year Macy’s lounge furniture corporation had an ROE of 17.2% and a dividend payout ratio of 22% what is the sustainable growth rate?

Expert Solution

The question is solved with the help of Dupont ratio.

Sustainable growth rate. =ROE*(1- dividend payout ratio)

= 0.1720*(1 – 0.22)

= 0.1720*0.78

= 0.1342*100

= 13.42%.

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jeff jeffy answered 2 days ago

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