Here are the abbreviated financial statements for Planner’s Peanuts: INCOME STATEMENT, 2019 Sales $ 8,600 Cost 7,100 Net income $ 1,500 BALANCE SHEET, YEAR-END   2018 2019   2018 2019 Assets $ 6,500 $ 7,000 Debt $ 853 $ 1,000       Equity 5,647 6,000 Total $ 6,500 $ 7,000 Total $ 6,500 $ 7,000 Assume the payout ratio is 50%. Calculate the internal growth rate where no external debt or equity is to be issued. Note: Do not round intermediate calculations. Enter your answer as a whole percent. Calculate the sustainable growth rate where the firm maintains a fixed debt ratio but issues no equity. Note: Do not round intermediate calculations. Enter your answer as a whole percent.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Here are the abbreviated financial statements for Planner’s Peanuts:

INCOME STATEMENT, 2019
Sales $ 8,600
Cost 7,100
Net income $ 1,500
BALANCE SHEET, YEAR-END
  2018 2019   2018 2019
Assets $ 6,500 $ 7,000 Debt $ 853 $ 1,000
      Equity 5,647 6,000
Total $ 6,500 $ 7,000 Total $ 6,500 $ 7,000

Assume the payout ratio is 50%.

  1. Calculate the internal growth rate where no external debt or equity is to be issued.

    Note: Do not round intermediate calculations. Enter your answer as a whole percent.

  2. Calculate the sustainable growth rate where the firm maintains a fixed debt ratio but issues no equity.

    Note: Do not round intermediate calculations. Enter your answer as a whole percent.

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