Retention ratio = (0.68 – 0.17) / 0.68 = 0.75 or 75%
Equity = Assets – liabilities = $33.8 million − $13.8 million = $20 million
Book value per share = Total equity / shares outstanding = $20 million / 5 million = $4.00
ROE = $0.68 / $4.00 = 0.17 or 17%
g = retention ratio × ROE = (0.75) × 0.17 = 0.1275 or 12.75%
