A firm is financing its growth with retained earnings it is


A firm is financing its growth with retained earnings. It is retaining 80 percent of its annual earnings. The firm's historic return on equity is 16 percent, a figure that is expected to continue into the future. How much will earnings grow over the year?

A. 16%

B. 3.2%

C. 21.4%

D. 12.8%

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Financial Management: A firm is financing its growth with retained earnings it is
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