You've collected the following information about Caccamisse, Incorporated: $ 280,000 $ 17,700 $ 6,500 $ 60,000 $ 91,000 Sales Net income Dividends Total debt Total equity a. What is the sustainable growth rate for the company? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b. Assuming it grows at this rate, how much new borrowing will take place in the coming year, assuming a constant debt-equity ratio? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. c. What growth rate could be supported with no outside financing at all? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. Answer is complete but not entirely correct. a. Sustainable growth rate b. Additional borrowing c. Growth rate 24.14 % $ 11,574.00 4.00 %

Essentials Of Investments
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ISBN:9781260013924
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Chapter1: Investments: Background And Issues
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You've collected the following information about Caccamisse, Incorporated:
Sales
Net income
Dividends
Total debt
Total equity
=
=
a. Sustainable growth rate
b. Additional borrowing
c. Growth rate
$ 280,000
$ 17,700
$ 6,500
$ 60,000
$ 91,000
a. What is the sustainable growth rate for the company?
Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
b. Assuming it grows at this rate, how much new borrowing will take place in the coming year, assuming a constant debt-equity
ratio?
Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.
c. What growth rate could be supported with no outside financing at all?
Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
Answer is complete but not entirely correct.
24.14%
$ 11,574.00 X
4.00
%
Transcribed Image Text:You've collected the following information about Caccamisse, Incorporated: Sales Net income Dividends Total debt Total equity = = a. Sustainable growth rate b. Additional borrowing c. Growth rate $ 280,000 $ 17,700 $ 6,500 $ 60,000 $ 91,000 a. What is the sustainable growth rate for the company? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b. Assuming it grows at this rate, how much new borrowing will take place in the coming year, assuming a constant debt-equity ratio? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. c. What growth rate could be supported with no outside financing at all? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. Answer is complete but not entirely correct. 24.14% $ 11,574.00 X 4.00 %
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