Give true answer this accounting question not use ai The Green Giant has a 5 percent profit marginand a 62 percent dividend payout ratio. Thetotal asset turnover is 1.2 and the equitymultiplier is 1.6. What is the sustainable rate ofgrowth?

Retention Ratio = (1-Dividend Payout Ratio)Retention Ratio= (1-62%)Retention Ratio = 38% Return on…

Answered: The Green Giant has a 5 percent profit…

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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The Green Giant has a 5 percent profit margin and a 62 percent dividend payout ratio. The total asset turnover is 1.2 and the equity multiplier is 1.6. What is the sustainable rate of growth?