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A firm’s profit margin is 16%, and its asset turnover ratio is 0.8. It has no debt, has net income of $40 per share, and pays dividends of $20 per share. What is the sustainable growth rate?
What is the Sustainable growth rate[removed] % 6. Here are the abbreviated financial statements for Planners Peanuts:INCOME STATEMENT, 2012 Sales$8,000 Cost 6,300 Net income$1,700 BALANCE SHEET, YEAR-END 20112012 20112012 Assets$4,500 $5,000 Debt$853 $1,000 Equity 3,647 4,000 Total$4,500 $5,000 Total$4,500 $5,000 If the dividend payout ratio is fixed at 50%, calculate the required total external financing for growth rates in 2013 of 25%, 30%, and 35%. (Do not round intermediate calculations. Round your answers to 2 decimal places.) External Financing 25%$ [removed] 30%[removed] 35%[removed] 7. Find the sustainable and internal growth rates for a firm with the following ratios: asset turnover = 1.50; profit margin = 6%; payout ratio = 40%; equity/assets = 0.50. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Sustainable growth rate[removed] % Internal growth rate[removed] % 8. Plank’s Plants had net income of $5,000 on sales of $100,000 last year. The firm paid a dividend of $1,100. Total assets were $200,000, of which $100,000 was financed by debt.a.What is the firm’s sustainable growth rate? (Do not round intermediate calculations. Round your answer to 1 decimal place.) Sustainable growth rate[removed] % b.If the firm grows at its sustainable growth rate, how much debt will be issued next year? (Do not round intermediate calculations.) New debt$ [removed] c.What would be the maximum possible growth rate if the firm did not issue any debt next year? (Do not round intermediate calculations. Round your answer to 1 decimal place.) Maximum growth rate[removed] % |
