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Basic Question 1 of 2

Which of the following will increase a company's sustainable growth rate of earnings?

A. increasing its dividend payout ratio.
B. increasing its return on equity.
C. decreasing its retention rate.

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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

Andrea Schildbach

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.