Assume the following ratios are constant: Total asset turnover = 2.31 Profit margin = 5.9% Equity multiplier = 1.78 Payout ratio = 34% a. What is the ROE? b. What is the sustainable growth rate?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Assume the following ratios are constant:
Total asset turnover = 2.31
Profit margin = 5.9%
Equity multiplier = 1.78
Payout ratio = 34%
a. What is the ROE?
b. What is the sustainable growth rate?
Transcribed Image Text:Assume the following ratios are constant: Total asset turnover = 2.31 Profit margin = 5.9% Equity multiplier = 1.78 Payout ratio = 34% a. What is the ROE? b. What is the sustainable growth rate?
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