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Basic Question 0 of 3
If the return on equity of a firm is 15 percent and the retention ratio is 40 percent, the sustainable growth rate of the firm's earnings and dividends should be:
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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
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.