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Basic Question 15 of 16
Which of the following will increase a company's growth rate of earnings?
B. Increasing its return on equity
C. Decreasing its retention rate
A. Increasing its dividend payout ratio
B. Increasing its return on equity
C. Decreasing its retention rate
User Contributed Comments 4
| User | Comment |
|---|---|
| mrushdi | HERE PAYOUT RATIO MOVES ADVERSLY |
| thekobe | g=rr*roe rr=1-dpr |
| tochiejehu | tanks guys u d bests |
| chesschh | a & c are the same, so B |
I am happy to say that I passed! Your study notes certainly helped prepare me for what was the most difficult exam I had ever taken.
Andrea Schildbach
Learning Outcome Statements
explain the rationale for using present value models to value equity and describe the dividend discount and free-cash-flow-to-equity models
calculate and interpret the intrinsic value of an equity security based on the Gordon (constant) growth dividend discount model or a two-stage dividend discount model, as appropriate
identify characteristics of companies for which the constant growth or a multistage dividend discount model is appropriate
explain advantages and disadvantages of each category of valuation model
CFA® 2025 Level I Curriculum, Volume 3, Module 8.