A company has $2 million in net income, of which it pays $500,000 in dividends. At the beginning of the financial year it had $10 million in shareholder equity. What is the company's sustainable growth rate? 5% 55% -55% -5%
A company has $2 million in net income, of which it pays $500,000 in dividends. At the beginning of the financial year it had $10 million in shareholder equity. What is the company's sustainable growth rate? 5% 55% -55% -5%
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter17: Dynamic Capital Structures And Corporate Valuation
Section: Chapter Questions
Problem 5P
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A company has $2 million in net income, of which it pays $500,000 in dividends. At the beginning of the financial year it had $10 million in shareholder equity. What is the company's sustainable growth rate?
5%
55%
-55%
-5%
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