Assume the following ratios are constant. Total asset turnover Profit margin Equity multiplier Payout ratio = = = = 2.28 5.6% 1.75 37% What is the sustainable growth rate? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.

Essentials Of Investments
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Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Problem 3-14 Sustainable Growth [LO 3]
Assume the following ratios are constant.
Total asset turnover
Profit margin
Equity multiplier
Payout ratio
=
Sustainable growth rate
=
=
=
2.28
5.6%
1.75
What is the sustainable growth rate?
Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
37%
%
Transcribed Image Text:Problem 3-14 Sustainable Growth [LO 3] Assume the following ratios are constant. Total asset turnover Profit margin Equity multiplier Payout ratio = Sustainable growth rate = = = 2.28 5.6% 1.75 What is the sustainable growth rate? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. 37% %
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