Loreto Inc. has the following financial ratios: asset turnover = 1.60; net profit margin (i.e., net income/sales) = 6%; payout ratio = 30%; equity/assets = 0.50.   a. What is Loreto's sustainable growth rate? b. What is its internal growth rate? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)  A. Sustainable growth rate   _______% B. Internal growth rate ______%

Essentials Of Investments
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Chapter1: Investments: Background And Issues
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Loreto Inc. has the following financial ratios: asset turnover = 1.60; net profit margin (i.e., net income/sales) = 6%; payout ratio = 30%; equity/assets = 0.50.

 

a. What is Loreto's sustainable growth rate?

b. What is its internal growth rate?

(Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

 A. Sustainable growth rate   _______%

B. Internal growth rate ______%

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