The sustainable growth rate is equal to:
SGR = Return of Equity *(1- Payout Ratio) = ROE*(1-b)
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Last year Lakesha’s Lounge Furniture Corporation had an ROE of 18.0 percent and a dividend payout ratio of 23 percent. What is the sustainable growth rate?What is the sustainable growth rate? (Do not round intermediatecalculations. Round your answer to 2 decimal places.)Sustainable growth rate%
1. A firm’s sustainable growth rate can be calculated using the formula Sustainable growth rate = (p(S/A)(1 + D/E) x R) / [1 – (p(S/A)(1 + D/E) x R)] Discuss the relationship between sustainable growth rate and each of the four variables in the above formula. (4 marks)
For a firm that pays no dividends, O a. Its return on equity will equal its sustainable growth rate. F COW O b. It is unable to pay any dividends. O c. It will have restrictions on its sustainable growth. e ti zdi da predlagala nila sa akin O d. Its shareholders will require a return equal to its return on equity. urne
7. Sustainable Growth Assuming the following ratios are constant, what is the sustainable growth rate Total asset turnover =3.20 Profit marge n =7,4% Equity multiplier 1.4 Payout ratio =60%
7. Sustainable Growth Assuming the following ratios are constant, what is the sustainable growth rate Total asset turnover =3.20 Profit marge n =7,4% Equity multiplier 1.4 Payout ratio =60%
Sustainable Growth [LO3] Based on the following information, calculate the sustainable growth rate for Kaleb’s Heavy Equipment: Profit margin = 7.3 % Capital intensity ratio = .80 Debt − equity ratio = .95 Net income = $73 , 000 Dividends = $24000
The sustainable growth rate a. is the highest growth rate attainable for a firm that pays no dividends b. is the highest growth rate attainable for a firm without issuing new stock. c. can never be greater than the return on equity. d. can be increased by decreasing leverage.
What is the Sustainable growth
rate?
Sig, Inc., wishes to maintain a growth rate of 12 percent per year and a debt-equity ratio of 43. The profit margin is 5.9 percent, and the ratio of total assets to sales is constant at 1.80 What dividend payout ratio is necessary to achieve this growth rate under these constraints? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded...
Who does a firms sustainable growth rate help?
QUESTION 19 The sustainable growth rate is defined as the maximum rate at which a firm can grow given which of the following conditions? ОА. New debt and external equity, provided the debt-equity ratio remains constant OB. No new external financing of any kind OC No new equity and a constant debt-equity ratio OD New debt and external equity in equal proportions ОЕ. No new debt but additional external equity equal to the increase in retained earnings