Stop and Go has a 4.5 percent profit margin and a 15 percent dividend payout ratio. The total asset turnover is 1.6 and the debt-equity ratio is 0.60. What is the sustainable rate of growth?
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What is the sustainable rate of growth
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- Assume the following ratios areconstant: Total asset turnover 2.8Profit margin 6.8 % Equitymultiplier 2 Payout ratio 30 %What is the sustainable growthrate? (Do not round intermediate Training calcThe Tree House has a pretax cost of debt of 6.1 percent and a return on assets of 10.4 percent. The debt–equity ratio is .39. Ignore taxes. What is the cost of equity?Hilltop Paving has a levered equity cost of capital of 14.92 percent. The debt-to-value ratio is .4, the assumed tax rate is 23 percent, and the pretax cost of debt is 7.2 percent. What is the estimated unlevered cost of equity?
- This is how to get a fair P/E ratio of a company using NOPAT growth, ROIIC (ROIC), and Cost of capital NOPAT growth: 10%ROIIC: 20% → Fair P/E: 32.3Cost of capital: 6.7% read the picture and it shows the instruscture, however, it does not say the specific stpes of how they get the fair P/E mulitple of 32.3. it summarlized without showing steps. So please show the step of how to get this result which is 32.3 Price to earnings ratio. U may use DCF for this! thank you!A firm had a debt ratio of 0.85. The pretax cost of debt is 8% and the reqiured return on asset is 15.5%. What is the cost of equity if we factorin the firms tax rate of 24%? A) 19.53 B) 18.92 C) 21.57 D) 20.35 E) 20.96A firm that is currently unlevered has WACC = rS = 10%/year. This company plans to do a recapitalization by issuing debt and repurchasing equity. After the recapitalization, the debt-to-equity (D/E) ratio will be 0.5. If the cost of debt, rD, is 6%, what will be rS after the recapitalization?
- You have the following information about Burgundy Basins, a sink manufacturer. Equity shares outstanding Stock price per share Yield to maturity on debt Book value of interest-bearing debt Coupon interest rate on debt Market value of debt Book value of equity Cost of equity capital Tax rate a. What is the internal rate of return on the investment? Note: Round your answer to 2 decimal places. Internal rate of return I Weighted-average cost Burgundy is contemplating what for the company is an average-risk investment costing $38 million and promising an annual ATCF of $4.9 million in perpetuity. % b. What is Burgundy's weighted-average cost of capital? Note: Round your answer to 2 decimal places. 20 million % $39 7.5% $350 million 4.4% $ 245 million $ 410 million 11.8% 35%Given the following information, what is the desired profit margin? D/E = 2current profit margin = 10%R = 0.6capital intensity ratio = 2desired sustainable growth rate = 15%Alpha Inc.'s beta coefficient is 1.4, the risk-free rate is 10 percent, and the market risk premium is 5 percent. Based on the capital asset pricing model (CAPM), what should be Alpha's cost of retained earnings? 11% 17% 16% 12%
- A. CALCULATE the cost of equity capital of H Ltd., whose risk-free rate of return equals 10%. The firm's beta equals 1.75 and the return on the market portfolio equals to 15%. B. The current ratio of H Ltd is 5:1 and standard current ratio given by accounting bodies is 2:1? Do you think that H Ltd should try to reduce its current ratio?What asset turnover ratio is necessary to achieve an ROE of 18% ????
