1) What is the internal growth rate? 2) What is the sustainable growth rate? % (Give as a percentage to 2 decimal places) % (Give as a percentage to 2 decimal places) 3) What is the sustainable growth rate if $13,000 of net profit was retained? percentage to 2 decimal places) % (Give as a

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter13: Capital Structure Concepts
Section: Chapter Questions
Problem 2P
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The Shane Warne Memorabilia Co has the following financial information:
EBIT
Beginning total assets
Beginning shareholders' equity
Payout ratio
* The marginal corporate tax rate is 28.5%
1) What is the internal growth rate?
2) What is the sustainable growth rate?
$54,000
$400,000
$250,000
2.0%
% (Give as a percentage to 2 decimal places)
% (Give as a percentage to 2 decimal places)
3) What is the sustainable growth rate if $13,000 of net profit was retained?
percentage to 2 decimal places)
% (Give as a
Transcribed Image Text:The Shane Warne Memorabilia Co has the following financial information: EBIT Beginning total assets Beginning shareholders' equity Payout ratio * The marginal corporate tax rate is 28.5% 1) What is the internal growth rate? 2) What is the sustainable growth rate? $54,000 $400,000 $250,000 2.0% % (Give as a percentage to 2 decimal places) % (Give as a percentage to 2 decimal places) 3) What is the sustainable growth rate if $13,000 of net profit was retained? percentage to 2 decimal places) % (Give as a
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