Answer to Question #98036 in Finance for Amanda

Answer to Question #98036 in Finance for Amanda

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Question #98036

Sandhill Co. just paid a dividend of $2.45 per share and its EPS is $17.15. Its book value per share (BVPS) is $120.05. Calculate Sandhill’s sustainable growth rate.

Expert’s answer

Earning per share (EPS)= $17.15Just paid dividend per share (DPS)= $2.45 Book value per share= $120.05Payout ratio Plow-back ratio = 1-Payout ratio Sustainable growth rate= Plow-black ratio*(EPS/Book value per share) Sustainable growth rate 12.28%

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