Assume the following ratios are constant: Total asset turnover = 2.80 . Profit margin = 4.8% Equity multiplier = 1.50 Payout ratio = 25% What is the sustainable growth rate?

Corporate Fin Focused Approach
5th Edition
ISBN:9781285660516
Author:EHRHARDT
Publisher:EHRHARDT
Chapter12: Corporate Valuation And Financial Planning
Section12.6: Additional Funds Needed (afn) Equation Method
Problem 5ST
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Assume the following ratios are constant:
Total asset turnover = 2.80
.
Profit margin = 4.8%
Equity multiplier = 1.50
Payout ratio = 25%
What is the sustainable growth rate?
Transcribed Image Text:Assume the following ratios are constant: Total asset turnover = 2.80 . Profit margin = 4.8% Equity multiplier = 1.50 Payout ratio = 25% What is the sustainable growth rate?
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