Answered: Stop and Go has a 4.5 percent profit…

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?

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter2: Financial Statements, Cash Flow, And Taxes

Section2.8: Performance Evaluation

Problem 1ST

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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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