1. What proportion of earnings is being plowed back into the firm if the sustainable growth rate is 8% and the firm's ROE is 20%?
A) 60%
B) 80%
C) 20%
D) 40%
2. You borrow a $328,000 add-on-interest loan from the credit union and will repay in equal installments over 19 years. The nominal rate of interest is 4.5%. Assuming daily repayment and compounding rate of interest, obtain the annual percentage rate?
a. 9.88%
b. 10.38%
c. 10.885
d. 11.38%