1.If Cantel, Inc., has current earnings of $17, dividends of $3.50, and a sustainable growth rate of 11 percent, what is its return on equity (ROE)?

A)   11.91%.

B)   17.64%.

C)   9.11%.

D)   13.85%.

2.Supergro has current dividends of $1, current earnings of $3, and a sustainable growth rate of 10 percent. What is Supergro’s return on equity?

A)   12%.

B)   15%.

C)   18%.

D)   20%.

3.If a firm has a return on equity of 15 percent, a current dividend of $1.00, and a sustainable growth rate of 9 percent, what are the firm’s current earnings?

A)   $1.75.

B)   $2.50.

C)   $2.00.

D)   $1.50.

答案和详解如下：

A)   11.91%.

B)   17.64%.

C)   9.11%.

D)   13.85%.

The correct answer was D)

Cantel’s ROE is 13.85%.

ROE = 11% / [1 – ($3.50/$17.00)] = 13.85%

2.Supergro has current dividends of $1, current earnings of $3, and a sustainable growth rate of 10 percent. What is Supergro’s return on equity?

A)   12%.

B)   15%.

C)   18%.

D)   20%.

The correct answer was B)

The ROE for Supergro can be determined by solving for ROE in the sustainable growth formula:

ROE = 10% / [1 – ($1/$3)] = 15%

3.If a firm has a return on equity of 15 percent, a current dividend of $1.00, and a sustainable growth rate of 9 percent, what are the firm’s current earnings?

A)   $1.75.

B)   $2.50.

C)   $2.00.

D)   $1.50.

The correct answer was B)

The earnings can be determined by solving for earnings in the sustainable growth formula:

9% = [1 – ($1/$Earnings)] × 0.15 or $1 / 0.4 = $Earnings = $2.50