A company's net income is USD150,000 out of which, 60% will be distributed as dividends. The total assets of the company amounted to USD600,000 and the total equity amounted to USD250,000. a. Based on the above, calculate the sustainable growth rate of the company as well as its internal growth rate. b. Explain the difference between the two (sustainable growth rate and internal growth rate).

A company's net income is USD150,000 out of which, 60% will be distributed as dividends. The total assets of the company amounted to USD600,000 and the total equity amounted to USD250,000. a. Based on the above, calculate the sustainable growth rate of the company as well as its internal growth rate. b. Explain the difference between the two (sustainable growth rate and internal growth rate).

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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