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] %
Here are the abbreviated financial statements for Planners Peanuts: |
INCOME STATEMENT, 2012 | |||
Sales | $ | 8,000 | |
Cost | 6,300 | ||
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Net income | $ | 1,700 | |
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BALANCE SHEET, YEAR-END | |||||||||
2011 | 2012 | 2011 | 2012 | ||||||
Assets | $ | 4,500 | $ | 5,000 | Debt | $ | 853 | $ | 1,000 |
Equity | 3,647 | 4,000 | |||||||
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Total | $ | 4,500 | $ | 5,000 | Total | $ | 4,500 | $ | 5,000 |
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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 |
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25% | $ [removed] | ||||||||||||||||||||||
30% | [removed] | ||||||||||||||||||||||
35% | [removed] | ||||||||||||||||||||||
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