Question

If Levine, Inc., has an ROA of 7.8 percent and a payout ratio of 25 percent,...

If Levine, Inc., has an ROA of 7.8 percent and a payout ratio of 25 percent, what is its internal growth rate?  (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Internal growth rate %
2 1
Add a comment Improve this question Transcribed image text
Answer #1

Retention ratio=1-payout ratio

=(1-0.25)=0.75

Internal growth rate=(ROA*Retention ratio)/[1-(ROA*Retention ratio)]

=(0.078*0.75)/[1-(0.078*0.75)]

=6.21%(Approx).

Add a comment
Know the answer?
Add Answer to:
If Levine, Inc., has an ROA of 7.8 percent and a payout ratio of 25 percent,...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Question 1: Question 2: Williams, Inc., has an ROA of 6 percent and a payout ratio...

    Question 1: Question 2: Williams, Inc., has an ROA of 6 percent and a payout ratio of 17 percent.    What is its internal growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Internal growth rate: _______ % Question 3: SDJ, Inc., has net working capital of $2,160, current liabilities of $5,510, and inventory of $1,240. What is the current ratio? (Do not round intermediate calculations and round...

  • myCoyote Homework 2 2 Saved A7X Co. has an ROA of 7.6 percent and a payout...

    myCoyote Homework 2 2 Saved A7X Co. has an ROA of 7.6 percent and a payout ratio of 25 percent. What is its internal growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Internal rate

  • Croc Gator Removal has a profit margin of 10 percent, total asset turnover of 1.1, and...

    Croc Gator Removal has a profit margin of 10 percent, total asset turnover of 1.1, and ROE of 14.36 percent. What is this firm's debt-equity ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Debt-equity ratio times Levine, Inc., has an ROA of 8.3 percent and a payout ratio of 31 percent. What is its internal growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2...

  • Assume Mudvayne, Inc., has a 9.7 percent ROA and a 39 percent payout ratio. Required: What...

    Assume Mudvayne, Inc., has a 9.7 percent ROA and a 39 percent payout ratio. Required: What is the internal growth rate? (Do not include the percent sign (%). Round your answer to 2 decimal places (e.g., 32.16). )   Internal growth rate %

  • 8. value 10.00 points Stone Sour Co. has an ROA of 11 percent and a payout...

    8. value 10.00 points Stone Sour Co. has an ROA of 11 percent and a payout ratio of 23 percent. What is its internal growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Internal growth rate Hints References eBook&Resources Hint #1 Check my work

  • Stone Sour Co. has an ROA of9 percent and a payout ratio of 30 percent hat...

    Stone Sour Co. has an ROA of9 percent and a payout ratio of 30 percent hat is its internal growth rate? (Do not round intermediate calculations and enter your answer as a percent Tounded to 2 decimal places:e0 92.16 Internal growth rate

  • Question If the Hunter Corp. has an ROE of 18 and a payout ratio of 26...

    Question If the Hunter Corp. has an ROE of 18 and a payout ratio of 26 percent, what is its sustainable growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Answer-  Sustainable growth rate % ______________ Question If Wilkinson, Inc., has an equity multiplier of 1.47, total asset turnover of 1.6, and a profit margin of 5.7 percent, what is its ROE? (Do not round intermediate calculations and enter...

  • The Crash Davis Driving School has an ROE of 16.3 percent and a payout ratio of...

    The Crash Davis Driving School has an ROE of 16.3 percent and a payout ratio of 62 percent. What is its sustainable growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Sustainable growth rate %

  • If the Crash Davis Driving School has an ROE of 14.6 percent and a payout ratio...

    If the Crash Davis Driving School has an ROE of 14.6 percent and a payout ratio of 20 percent, what is its sustainable growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Sustainable growth rate% _____

  • The Crash Davis Driving School has an ROE of 16.9 percent and a payout ratio of...

    The Crash Davis Driving School has an ROE of 16.9 percent and a payout ratio of 68 percent. What is its sustainable growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Sustainable growth rate             %

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT