FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Which option is correct?

Metro Credit Union is forecasting a
return on equity of 12 percent for this
year. The board of directors wants to
maintain its current policy of paying out
dividends that amount to 20% of any net
earnings the credit union earns. How
quickly can Metro Credit Union's assets
grow this year without jeopardizing its
capital to assets ratio?
(A) 12 percent
(B) 9.3 percent
(C) 9.6 percent
(D) 6 percent
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Transcribed Image Text:Metro Credit Union is forecasting a return on equity of 12 percent for this year. The board of directors wants to maintain its current policy of paying out dividends that amount to 20% of any net earnings the credit union earns. How quickly can Metro Credit Union's assets grow this year without jeopardizing its capital to assets ratio? (A) 12 percent (B) 9.3 percent (C) 9.6 percent (D) 6 percent
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