Assume the following ratios are constant. Total asset turnover Profit margin Equity multiplier Payout ratio What is the sustainable growth rate? ** 2.29 5.7% 1.76 36%

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 14MC: This calculation determines profitability or growth potential of an investment, expressed as a...
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Assume the following ratios are constant.
Total asset turnover
Profit margin
Equity multiplier
Payout ration
2.29
Sustainable growth rate
5.7%
1.76
36%
What is the sustainable growth rate?
Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
Transcribed Image Text:Assume the following ratios are constant. Total asset turnover Profit margin Equity multiplier Payout ration 2.29 Sustainable growth rate 5.7% 1.76 36% What is the sustainable growth rate? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
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