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?
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?
Chapter2: Financial Statements, Cash Flow, And Taxes
Section2.8: Performance Evaluation
Problem 1ST
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What is the sustainable rate of growth? General accounting
Transcribed Image Text: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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