![Problem 4-20 Sustainable Growth (LO3] You are given the following information for Hendrix Guitars, Inc. Profit margin 5.5% To](http://img.homeworklib.com/questions/eb4c6980-758c-11ea-91dd-fff9e8580ed8.png?x-oss-process=image/resize,w_560)
Homework Answers
| Total equity ratio = 1 - Total debt ratio = 1 - 0.36 | 0.64 |
| Debt-equity ratio = Total debt ratio / Total equity ratio = 0.36 / 0.64 | 56.25% |
| Return on equity = Profit margin * Total assets turnover * ( 1 + Debt-equity ratio ) = 5.5% * 1.1 * ( 1 + 56.25% ) | 9.45% |
| Retention ratio = 1 - Dividend payout ratio = 1 - 25% | 75% |
| Sustainable growth rate = Return on equity * Retention ratio = 9.45% * 75% | 7.09% |
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Problem 4-20 Sustainable Growth (LO3] You are given the following information for Hendrix Guitars, Inc. Profit...
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You are given the following information for Hendrix Guitars, Inc. Profit margin Total asset turnover Total debt ratio Payout ratio 6.0% 1.8 41 20% Calculate the 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 %
You are given the following information for Hendrix Guitars, Inc Profit margin Total asset 6.8% 1.8...
You are given the following information for Hendrix Guitars, Inc Profit margin Total asset 6.8% 1.8 turnover Total debt ratio 49 Payout ratio 30% Calculate the 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 is complete but not entirely correct. Sustainable growth rate 8.57 %
101. Based on the following information, what is the sustainable growth rate of Hendrix Guitars, Inc.?...
101. Based on the following information, what is the sustainable growth rate of Hendrix Guitars, Inc.? Profit margin Total asset turnover Total debt ratio Payout ratico 5.60 percent 1.76 0.66 70 percent A. 7.68 percent B. 9.52 percent C. 11.12 percent D. 13.49 percent E. 14.41 percent
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High Flyer, Inc., wishes to maintain a growth rate of 14.25 percent per year and a...
High Flyer, Inc., wishes to maintain a growth rate of 14.25 percent per year and a debt- equity ratio of .55. The profit margin is 4.5 percent, and total asset turnover is constant at 1.15. a. What is the dividend payout ratio? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the maximum sustainable growth rate for...
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You are given the following information for Hendrix Guitars, Inc. Profit margin Total asset turnover Total debt ratio Payout ratio 6.0% 1.8 41 20% Calculate the 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 %
You are given the following information for Hendrix Guitars, Inc Profit margin Total asset 6.8% 1.8 turnover Total debt ratio 49 Payout ratio 30% Calculate the 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 is complete but not entirely correct. Sustainable growth rate 8.57 %
101. Based on the following information, what is the sustainable growth rate of Hendrix Guitars, Inc.? Profit margin Total asset turnover Total debt ratio Payout ratico 5.60 percent 1.76 0.66 70 percent A. 7.68 percent B. 9.52 percent C. 11.12 percent D. 13.49 percent E. 14.41 percent
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