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Calculation of growth rate?

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(Querist)
06 May 2023 ROE 15% dividend paid 30%
Calculate the growth rate ?

Can anyone solve this ??
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CA R SEETHARAMAN

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CA R SEETHARAMAN (Expert)
06 May 2023 For calculating growth rate this year ROE has to be compared with last year ROE.
Higher dividend might have been paid out of earlier year profit
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CA Abhishek Singh

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CA Abhishek Singh (Querist)
07 May 2023 This is the exact question came in IBBI valuation exam. No other information.



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CA R SEETHARAMAN

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CA R SEETHARAMAN (Expert)
07 May 2023 It can't be calculated without the previous year ROE. It's a tricky question.
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CA Abhishek Singh

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CA Abhishek Singh (Querist)
23 May 2023 I got the answer
Growth rate ( equity) = ROE * retention ratio

Retention ratio = 100-30=70%
Growth rate = 15%*70%= 10.5%

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