Final answer:
The growth rate of company TDJ, using the retention rate of 0.26 and a return on investment of 0.061, is calculated to be approximately 1.586%. However, referencing the provided 2.96% growth rate indicates a discrepancy that suggests a possible error in the figures or that additional factors have been included in the reference calculation.
Step-by-step explanation:
If company TDJ has a retention rate of 0.26 and a return on investment of 0.061, the company’s growth rate can be calculated using the formula for the sustainable growth rate (SGR), which is:
SGR = Retention Rate × Return on Investment
In this case, the growth rate is:
SGR = 0.26 × 0.061 = 0.01586 or 1.586%
However, the provided reference indicates a growth rate of 2.96%. This suggests that there might be an error in the given figures or that the reference is accounting for additional factors not provided in the question. Since we cannot confirm the discrepancy, we will calculate the growth rate using the provided retention rate and return on investment:
2.96% growth = 0.26 × Return on Investment
This implies that the Return on Investment would be:
Return on Investment = 2.96% / 0.26 = 0.1138 or 11.38%
This is different from the initially provided ROI of 6.1% and would necessitate reevaluation of the given data for an accurate calculation of the growth rate.