Retention ratio is 0.55 and return on equity is 12.5% then growth retention model would be
A. 11.95%
B. 6.88%
C. 13.05%
D. 22.72%
Answer: Option B
Solution (By Examveda Team)
Growth retention model = Return on equity × Retention ratio= 12.5% × 0.55 = 6.88%
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