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Sales Costs Taxable income Taxes (21%) Net income $ 16,000 9,600 $6,400 1,344 $5,056 Current assets $34,501 Debt Fixed assets 24,142 Equity $58,643 Total $ 34,003 24,640 Total $ 58,643 Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 34 percent dividend payout ratio. What is the sustainable growth rate?

Sales Costs Taxable income Taxes (21%) Net income $ 16,000 9,600 $6,400 1,344 $5,056 Current assets $34,501 Debt Fixed assets 24,142 Equity $58,643 Total $ 34,003 24,640 Total $ 58,643 Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 34 percent dividend payout ratio. What is the sustainable growth rate?

Essentials Of Investments
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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The most recent financial statements for Bello Company are shown here: Income Statement Sales Costs $ 16,000 Current assets $ 34,501 9,600 Fixed assets 24,142 Taxable $ 6,400 $58,643 income Taxes (21%) 1,344 Net income $ 5,056 Total Balance Sheet What is the sustainable growth rate? Debt Equity Total $ 34,003 24,640 $ 58,643 Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 34 percent dividend payout ratio.
Transcribed Image Text:The most recent financial statements for Bello Company are shown here: Income Statement Sales Costs $ 16,000 Current assets $ 34,501 9,600 Fixed assets 24,142 Taxable $ 6,400 $58,643 income Taxes (21%) 1,344 Net income $ 5,056 Total Balance Sheet What is the sustainable growth rate? Debt Equity Total $ 34,003 24,640 $ 58,643 Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 34 percent dividend payout ratio.
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