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Assume the following ratios are constant: Total asset turnover = 3.31 Profit margin = 6.9% Equity multiplier = 2.75 Payout ratio = 38% a. What is the ROE? b. What is the sustainable growth rate? (Round your calculation to 2 decimal places)

Assume the following ratios are constant: Total asset turnover = 3.31 Profit margin = 6.9% Equity multiplier = 2.75 Payout ratio = 38% a. What is the ROE? b. What is the sustainable growth rate? (Round your calculation to 2 decimal places)

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 14MC: This calculation determines profitability or growth potential of an investment, expressed as a...
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Financial accounting 3.2.36

Assume the following ratios are constant: Total asset turnover = 3.31 Profit margin = 6.9% Equity multiplier = 2.75 Payout ratio = 38% a. What is the ROE? b. What is the sustainable growth rate? (Round your calculation to 2 decimal places)
Transcribed Image Text:Assume the following ratios are constant: Total asset turnover = 3.31 Profit margin = 6.9% Equity multiplier = 2.75 Payout ratio = 38% a. What is the ROE? b. What is the sustainable growth rate? (Round your calculation to 2 decimal places)
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