Columbus Business Daily

What is the sustainable growth rate? Include the ROE and plowback ratio.?

At the annual strategic planning meeting of my company, new projects are presented and it is my task to assess the expected financial outcomes. In this case, my division presents a new product development project that projects a rate-of-return or Return on Equity (ROE) of 20.0 percent. Management plans to plow back 30.0 percent of all earnings to the company. Earnings this year are $3 per share and investors expect a 12 percent rate of return on the company's stock.

Public Comments

1. I think your question is too vague for what you are asking. First, I'm guessing the company has more than one project ongoing, and two, the financial accounting questions are basic cost accounting and should be available on your software.