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Basic Question 1 of 2
Which of the following will increase a company's sustainable 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.
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I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes
Learning Outcome Statements
compare the free cash flow to the firm (FCFF) and free cash flow to equity (FCFE) approaches to valuation;
explain the ownership perspective implicit in the FCFE approach;
CFA® 2026 Level II Curriculum, Volume 4, Module 21.