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Examveda

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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