CN Railways is North America’s fifth largest railway. Use the financia

CN Railways is North America’s fifth largest railway. Use the financial information in the table to calculate CN’s maximum sustainable growth rate.

CN Railway Company
As of December 31, Year 10
ROE 8.62%
ROA 3.02%
Net Profit Margin 9.35%
Total Asset Turnover 0.32
Dividend Payout Rate 30%

A) 2.2%
B) 3.1%
C) 6.4%
D) 7.0%
E) 9.4%

ANSWER

C