b. If the payout ratio is set at 55% and the firm maintains a fixed debt ratio but issues no equity, what is the maximum possible growth rate for Archimedes? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) X Answer is complete but not entirely correct. Sustainable growth rate 36.53 × % Abbreviated financial statements for Archimedes Levers are shown in the table below. Assume sales and expenses increase by 16% in 2019 and all assets and liabilities increase correspondingly. Income Statement Sales Costs, including interest Net income Net assets Total Balance Sheet, Year-End 2017 $ 6,100 2018 $ 6,549 $7,400 5,200 $2,200 $ 6,549 $ 6,100 Debt Equity Total Answer is complete but not entirely correct. Internal growth rate 18.81 X % 2018 $ 2,849 3,700 $ 6,549 a. If the payout ratio is set at 55% and no external debt or equity is to be issued, what is the maximum possible growth rate for Archimedes? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) 2017 $ 2,733 3,367 $ 6,100
b. If the payout ratio is set at 55% and the firm maintains a fixed debt ratio but issues no equity, what is the maximum possible growth rate for Archimedes? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) X Answer is complete but not entirely correct. Sustainable growth rate 36.53 × % Abbreviated financial statements for Archimedes Levers are shown in the table below. Assume sales and expenses increase by 16% in 2019 and all assets and liabilities increase correspondingly. Income Statement Sales Costs, including interest Net income Net assets Total Balance Sheet, Year-End 2017 $ 6,100 2018 $ 6,549 $7,400 5,200 $2,200 $ 6,549 $ 6,100 Debt Equity Total Answer is complete but not entirely correct. Internal growth rate 18.81 X % 2018 $ 2,849 3,700 $ 6,549 a. If the payout ratio is set at 55% and no external debt or equity is to be issued, what is the maximum possible growth rate for Archimedes? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) 2017 $ 2,733 3,367 $ 6,100
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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Transcribed Image Text:b. If the payout ratio is set at 55% and the firm maintains a fixed debt ratio but issues no equity, what is the maximum possible growth
rate for Archimedes? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
X Answer is complete but not entirely correct.
Sustainable growth rate
36.53 × %
Transcribed Image Text:Abbreviated financial statements for Archimedes Levers are shown in the table below. Assume sales and expenses increase by 16% in
2019 and all assets and liabilities increase correspondingly.
Income Statement
Sales
Costs, including interest
Net income
Net assets
Total
Balance Sheet, Year-End
2017
$ 6,100
2018
$ 6,549
$7,400
5,200
$2,200
$ 6,549
$ 6,100
Debt
Equity
Total
Answer is complete but not entirely correct.
Internal growth rate
18.81 X %
2018
$ 2,849
3,700
$ 6,549
a. If the payout ratio is set at 55% and no external debt or equity is to be issued, what is the maximum possible growth rate for
Archimedes? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
2017
$ 2,733
3,367
$ 6,100
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