Assume the following ratios are constant: Total asset turnover = 1.92 . Profit margin = 6.3% . Equity multiplier = 2.12 . Payout ratio = 38% a. What is the ROE? b. What is the sustainable growth rate?

Assume the following ratios are constant: Total asset turnover = 1.92 . Profit margin = 6.3% . Equity multiplier = 2.12 . Payout ratio = 38% a. What is the ROE? b. What is the sustainable growth rate?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter9: Corporate Valuation And Financial Planning

Section: Chapter Questions

Problem 5Q

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Assume the following ratios are constant:
Total asset turnover = 1.92
.
Profit margin = 6.3%
.
Equity multiplier = 2.12
.
Payout ratio = 38%
a. What is the ROE?
b. What is the sustainable growth rate?

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