Homework Answers
Answer:
Return on Equity (ROE) = 16%
Retention Ratio (b) = 1 – Dividend Payout Ratio
Retention Ratio (b) = 1 – 0.40
Retention Ratio (b) = 0.60 or 60%
Sustainable Growth Rate = ROE * b/ 1 – (ROE – b)
Sustainable Growth Rate = 0.16 * 0.60 / 1 – (0.16 * 0.60)
Sustainable Growth Rate = 0.096 / 0.904
Sustainable Growth Rate = 10.62%
Option B is Correct.
Add Answer to:
ollapse QUESTION 18 A firm has a return on equity of 16 percent, a return on...
A firm has a return on equity of 16 percent, a return on assets of 11...
A firm has a return on equity of 16 percent, a return on assets of 11 percent, and a 40 percent dividend payout ratio. What is the sustainable growth rate! O A 7.12 percent OB. 5.72 percent OC 10.62 percent OD.6.84 percent OE. 9.58 percent
A firm wants a sustainable growth rate of 2.78 percent while maintaining a dividend payout ratio...
A firm wants a sustainable growth rate of 2.78 percent while maintaining a dividend payout ratio of 20 percent and a profit margin of 4 percent. The firm has a capital intensity ratio of 2. What is the debt–equity ratio that is required to achieve the firm's desired rate of growth? Multiple Choice .80 times .69 times .85 times .31 times .16 times
Fulkerson Manufacturing wishes to maintain a sustainable growth rate of 9.25 percent a year, a debt–equity...
Fulkerson Manufacturing wishes to maintain a sustainable growth rate of 9.25 percent a year, a debt–equity ratio of .40, and a dividend payout ratio of 32.5 percent. The ratio of total assets to sales is constant at 1.35. What profit margin must the firm achieve in order to meet its growth rate goal? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Profit margin %
A firm wants a sustainable growth rate of 3.08 percent while maintaining a dividend payout ratio...
A firm wants a sustainable growth rate of 3.08 percent while maintaining a dividend payout ratio of 26 percent and a profit margin of 5 percent. The firm has a capital intensity ratio of 2. What is the debt-equity ratio that is required to achieve the firm's desired rate of growth? ο ο 74 times ο ο ο
The corporation's return on equity of 1 1 19% and a dividend payout ratio of 20...
The corporation's return on equity of 1 1 19% and a dividend payout ratio of 20 percent sustainable rate of growth? Oa, 11.2% Ob, 9.6% Oc. 10.9% 0 d. 9.3% what is the 9.8% e.
The firm has a 9 percent return on assets and a 75 percent dividend payout ratio....
The firm has a 9 percent return on assets and a 75 percent dividend payout ratio. What is the internal growth rate? Oa 2.3% O b. 3.2% 4.0% Od. 4.1% Oe, 52% C.
Exelon has a 16 percent return on equity and a 43 percent retention ratio. What is...
Exelon has a 16 percent return on equity and a 43 percent retention ratio. What is the sustainable growth rate (under constant debt/equity)? Hint: Apply the formula g = ROE x b / (1 - ROE x b) 7.39 Percent 6.41 Percent 8.49 Percent 8.49 Percent 9.12 Percent
Your firm has an ROE of 11 7%, a payout ratio of 26%. S629, 700 of stockholders' equity, and S430,000 of debt sustainable growth rate this year, how much additional debt will you need to issu...
Your firm has an ROE of 11 7%, a payout ratio of 26%. S629, 700 of stockholders' equity, and S430,000 of debt sustainable growth rate this year, how much additional debt will you need to issue? t you grow at your The Tax cuts and Jobs Act of 2017 temporarily allows 100% bonus depreciation (effectively expensing capital expenditures However, we will still include depreciation forecasting in this chapter and in these problems in anticipation of the return of standard depreciation...
Check my work Problem 18-16 Feasible Growth Rates (L03) Eagle Sports Supply has the following financial...
Check my work Problem 18-16 Feasible Growth Rates (L03) Eagle Sports Supply has the following financial statements. Assume that Eagle's assets are proportional to its sales INCOME STATEMENT, 2019 Sales $1,eee Costs 190 Interest Taxes Net income $ 600 140 2018 3,450 Assets $ BALANCE SHEET, YEAR-END 2019 $3,750 Debt Equity $ 3,758 Total $ $ 2018 1,150 2,3ee 3,450 2019 1.250 2. 50 3,750 Total $ 3,450 $ $ a. What is the internal growth rate of Eagle Sports...
Check my work Problem 18-16 Feasible Growth Rates (L03) Eagle Sports Supply has the following financial...
Check my work Problem 18-16 Feasible Growth Rates (L03) Eagle Sports Supply has the following financial statements. Assume that Eagle's assets are proportional to its sales INCOME STATEMENT, 2019 Sales $1,eee Costs 190 Interest Taxes Net income $ 600 140 2018 3,450 Assets $ BALANCE SHEET, YEAR-END 2019 $ 3,750 Debt Equity $ 3,758 Total $ $ 2018 1.150 2,3ee 3,450 2019 1.250 2.500 3,750 Total $ 3,450 $ $ a. What is the internal growth rate of Eagle Sports...
A firm has a return on equity of 16 percent, a return on assets of 11 percent, and a 40 percent dividend payout ratio. What is the sustainable growth rate! O A 7.12 percent OB. 5.72 percent OC 10.62 percent OD.6.84 percent OE. 9.58 percent
A firm wants a sustainable growth rate of 3.08 percent while maintaining a dividend payout ratio of 26 percent and a profit margin of 5 percent. The firm has a capital intensity ratio of 2. What is the debt-equity ratio that is required to achieve the firm's desired rate of growth? ο ο 74 times ο ο ο
The corporation's return on equity of 1 1 19% and a dividend payout ratio of 20 percent sustainable rate of growth? Oa, 11.2% Ob, 9.6% Oc. 10.9% 0 d. 9.3% what is the 9.8% e.
The firm has a 9 percent return on assets and a 75 percent dividend payout ratio. What is the internal growth rate? Oa 2.3% O b. 3.2% 4.0% Od. 4.1% Oe, 52% C.
Your firm has an ROE of 11 7%, a payout ratio of 26%. S629, 700 of stockholders' equity, and S430,000 of debt sustainable growth rate this year, how much additional debt will you need to issue? t you grow at your The Tax cuts and Jobs Act of 2017 temporarily allows 100% bonus depreciation (effectively expensing capital expenditures However, we will still include depreciation forecasting in this chapter and in these problems in anticipation of the return of standard depreciation...
Check my work Problem 18-16 Feasible Growth Rates (L03) Eagle Sports Supply has the following financial statements. Assume that Eagle's assets are proportional to its sales INCOME STATEMENT, 2019 Sales $1,eee Costs 190 Interest Taxes Net income $ 600 140 2018 3,450 Assets $ BALANCE SHEET, YEAR-END 2019 $3,750 Debt Equity $ 3,758 Total $ $ 2018 1,150 2,3ee 3,450 2019 1.250 2. 50 3,750 Total $ 3,450 $ $ a. What is the internal growth rate of Eagle Sports...
Check my work Problem 18-16 Feasible Growth Rates (L03) Eagle Sports Supply has the following financial statements. Assume that Eagle's assets are proportional to its sales INCOME STATEMENT, 2019 Sales $1,eee Costs 190 Interest Taxes Net income $ 600 140 2018 3,450 Assets $ BALANCE SHEET, YEAR-END 2019 $ 3,750 Debt Equity $ 3,758 Total $ $ 2018 1.150 2,3ee 3,450 2019 1.250 2.500 3,750 Total $ 3,450 $ $ a. What is the internal growth rate of Eagle Sports...
Most questions answered within 3 hours.
-
Derive the long wavelength limit of the Planck energy density
distribution
asked 4 minutes ago -
Phosphorous + bromine = phosphorous tribromide. If 35.0 g of
bromine are reacted and 27.9 grams...
asked 15 minutes ago -
Calculate the pH of each of the following solutions.
0.50 M HBr
3.1×10−4 M KOH
4.2×10−5...
asked 3 hours ago -
For the year ended December 31, Depot Max’s cost of merchandise
sold was $85,600. Inventory at the...
asked 3 hours ago -
Week 10 - Professional Memo Assignment
Professional Memo Assignment
Your mission for this week, should you...
asked 3 hours ago -
Write a Python program that stores the data for each
player on the team, and it...
asked 3 hours ago -
In
the last 3 months, mike never knows when he is going to get his
allowance...
asked 4 hours ago -
Is Ca(OH)2 a Bronsted base, Lewis base, or both? Why?
asked 4 hours ago -
1A- Why don’t voters complain about U.S. tariffs on imported
sugar?
Because sugar is only a...
asked 4 hours ago -
Cash Payback Period
Primera Banco is evaluating two capital investment proposals for
a drive-up ATM kiosk,...
asked 4 hours ago -
Create a button in Swift (Xcode) that will create a charge,
create a charge using Stripe's...
asked 4 hours ago -
The reaction rate of CO and NO2 in the reaction
CO(g) + NO2(g) → CO2(g) +...
asked 4 hours ago