Problem 29-28 Forecast growth rate Bio-Plasma Corp. is growing at 31% per year. It is all-equity-financed and has total assets of $1.1 million. Its return on equity is 21%. Its plowback ratio is 41%. a. What is the internal growth rate? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.) b. What is the firm's need for external financing this year? (Enter your answer in dollars not in millions.) c. By how much would the firm increase its internal growth rate if it reduced its payout rate to zero? (Do not round intermediate calculations. Enter your answer as a percent rounded to the nearest whole number.) d. What is the firm's revised need for external financing this year? (Enter your answer in dollars not in millions.) a. Internal growth rate b. External financing need c. Internal growth rate d. External financing need
Problem 29-28 Forecast growth rate Bio-Plasma Corp. is growing at 31% per year. It is all-equity-financed and has total assets of $1.1 million. Its return on equity is 21%. Its plowback ratio is 41%. a. What is the internal growth rate? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.) b. What is the firm's need for external financing this year? (Enter your answer in dollars not in millions.) c. By how much would the firm increase its internal growth rate if it reduced its payout rate to zero? (Do not round intermediate calculations. Enter your answer as a percent rounded to the nearest whole number.) d. What is the firm's revised need for external financing this year? (Enter your answer in dollars not in millions.) a. Internal growth rate b. External financing need c. Internal growth rate d. External financing need
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
Section: Chapter Questions
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Transcribed Image Text:Problem 29-28 Forecast growth rate
Bio-Plasma Corp. is growing at 31% per year. It is all-equity-financed and has total assets of $1.1 million. Its return on equity is 21%.
Its plowback ratio is 41%.
a. What is the internal growth rate? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1
decimal place.)
b. What is the firm's need for external financing this year? (Enter your answer in dollars not in millions.)
c. By how much would the firm increase its internal growth rate if it reduced its payout rate to zero? (Do not round intermediate
calculations. Enter your answer as a percent rounded to the nearest whole number.)
d. What is the firm's revised need for external financing this year? (Enter your answer in dollars not in millions.)
a. Internal growth rate
b. External financing need
c. Internal growth rate
d. External financing need
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