RoE 与g 的关系

问题如下：

1. Which of the following long-term FCFE growth rates is most consistent with the facts and stated policies of Emerald?

选项：

A.

5 percent or lower.

B.

2 percent or higher.

C.

8 percent or higher.

解释：

C is correct.

The sustainable growth rate is return on equity (ROE) multiplied by the retention ratio. ROE is 10 percent, and the retention ratio is 1-Payout ratio, or 1.0- 0.2 = 0.8. The sustainable growth rate is 0.8 × 10% = 8%. FCFE growth should be at least 8 percent per year in the long term.