Option A is correct,
Sustainable Growth Rate = (1 - b)(ROE)
With no dividend, b = 0
So,
Sustainable Growth Rate = ROE
Please "Like" if you find this useful and comment if you have any doubts.
For a firm that pays no dividends, O a. Its return on equity will equal its sustainable growth rate. F COW O b. It...
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.
5. Sustainable growth As a firm grows, it must support increases in revenue with new investments in assets. The self-supporting, or sustainable, growth model helps a firm assess how rapidly it can grow, while maintaining a balance between its cash outflows (increases in noncash assets) and inflows (funds resulting from increases in liabilities or equity). Consider the following case of Bohemian Manufacturing Company: Bohemian Manufacturing Company has no debt in its capital structure and has $300,000,000 in assets. Its sales...
P/E and Growth Daisy Pixie Stix pays out 65% of its earnings as dividends. The firm has been earnings $0.10 cents per dollar of equity invested in the firm and investors require a 8.00% return. The last annual earnings were $2.00 per share. What is the P/E ratio of the stock? 28.56 36.65 14.44 23.11
The sustainable growth rate of a firm is best described as the _____ growth rate achievable _____. A maximum; excluding external financing of any kind B maximum; with unlimited debt financing C minimum; assuming a 100 percent retention ratio D minimum; if the firm maintains a constant equity multiplier E maximum; excluding any external equity financing while maintaining a constant debt-equity ratio
5. Sustainable growth Aa Aa E As a firm grows, it must support increases in revenue with new investments in assets. The self-supporting, or sustainable, growth model helps a firm assess how rapidly it can grow, while maintaining a balance between its cash outflows (increases in noncash assets) and inflows (funds resulting from increases in liabilities or equity). Consider the following case of Cold Duck Manufacturing Inc.: Cold Duck Manufacturing Inc. has no debt in its capital structure and has...
P/E and Growth Daisy Pixie Stix pays out 65% of its earnings as dividends. The firm has been earnings $0.17 cents per dollar of equity invested in the firm and investors require a 10.00% return. The last annual earnings were $2.00 per share. What is the P/E ratio of the stock? Multiple Choice 31.78 24.72 Oo oo 16.05 41.87
There is a general consensus among analysts that Portis Inc. has a sustainable dividend growth rate of 5.5%. Given that Portis pays out 25% of its net incomes as dividends each year, what is the return on equity (i.e. ROE) for this firm? Not enough information. 4.00% 7.33% 5.50%
There is a general consensus among analysts that Portis Inc. has a sustainable dividend growth rate of 5.5%. Given that Portis pays out 25% of its net incomes as dividends each year, what is the return on equity (i.e. ROE) for this firm? Question 23 options: 5.50% 7.33% Not enough information. 4.00%
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
age Mail Chapagain, S.. O (5) 3 Hours of Beau... Course Home Codification Application for Vist... CENGAGE MINDTAP Ch 09: Assignment Corporate Valuation and Financial Planning 5. Sustainable growth As a firm grows, it must support increases in revenue with new investments in assets. The self-supporting, or sustainable growth model helps a firm assess how rapidly it can grow, while maintaining a balance between its cash outflows (increases in noncash assets) and inflows (funds resulting from increases in liabilities or...