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(a) Calculate the sustainable growth rate given the following information: equity $500,000; total assets $600,000; net income $200,000; dividends paid $50,000? (B) Would the internal growth rate be higher or lower and by how much?

(a) Calculate the sustainable growth rate given the following information: equity $500,000; total assets $600,000; net income $200,000; dividends paid $50,000? (B) Would the internal growth rate be higher or lower and by how much?

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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(a) Calculate the sustainable growth rate given the following information: equity $500,000; total assets $600,000; net income $200,000; dividends paid $50,000? (B) Would the internal growth rate be higher or lower and by how much? Show calculations in detail.
Transcribed Image Text:(a) Calculate the sustainable growth rate given the following information: equity $500,000; total assets $600,000; net income $200,000; dividends paid $50,000? (B) Would the internal growth rate be higher or lower and by how much? Show calculations in detail.
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