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 financial leverage is 1.60. What is the sustainable rate of growth? O a. 9.13 percent b. 9.89 percent O c. 10.85 percent O d. 9.54 percent

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Q: alculate the sustainable growth rate

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A: Step 1: Step 2: Step 3: Step 4:

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A: The sustainable growth rate is given by:SGR =ROE×bwhere b is the retention ratio (also known as the…