The Green Giant has a 5% profit margin and a 36% dividend payout ratio. The total asset turnover is 1.4 and the equity multiplier is 1.4. What is the sustainable rate of growth?
The Green Giant has a 5% profit margin and a 36% dividend payout ratio. The total asset turnover is 1.4 and the equity multiplier is 1.4. What is the sustainable rate of growth?
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter8: Basic Stock Valuation
Section: Chapter Questions
Problem 11MC
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Financial Accounting
Transcribed Image Text:The Green Giant has a 5% profit margin
and a 36% dividend payout ratio. The
total asset turnover is 1.4 and the equity
multiplier is 1.4.
What is the sustainable rate of growth?
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