Final answer:
Using the equation g=b× ROE to determine the growth rate is not always accurate as it makes assumptions and overlooks potential changes. A more robust formula such as Future Value = Present Value x (1 + g) can be used for growth rate calculations along with graphical representations for better understanding.
Step-by-step explanation:
The statement that using the equation g=b× ROE will always result in the correct growth rate for future periods is false. This equation estimates the growth rate based on the retention ratio (b) and the return on equity (ROE), but it makes several assumptions and does not account for changes that could affect future growth. For a more comprehensive calculation of the growth rate, one might use the formula Future Value = Present Value x (1 + g), which reflects the compounding of growth over periods. Additionally, graphs and other mathematical tools are often used to better understand growth trends and rates.