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Basic Question 0 of 4
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 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
calculate the value of a private company using free cash flow, capitalized cash flow, and/or excess earnings methods;
explain factors that require adjustment when estimating the discount rate for private companies;
compare models used to estimate the required rate of return to private company equity (for example, the CAPM, the expanded CAPM, and the build-up approach);
CFA® 2026 Level II Curriculum, Volume 4, Module 25.