The most recent financial statements for Bello Co. are shown here:   Income Statement   Balance Sheet     Sales $ 19,800   Current assets $ 11,880   Debt $ 16,240     Costs   13,500   Fixed assets   30,150   Equity   25,790                             Taxable income $ 6,300       Total $ 42,030       Total $ 42,030                             Taxes (24%)   1,512                                               Net income $ 4,788                                               Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 35 percent dividend payout ratio.    What is the sustainable growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
icon
Related questions
Question

The most recent financial statements for Bello Co. are shown here:

 

Income Statement   Balance Sheet  
  Sales $ 19,800   Current assets $ 11,880   Debt $ 16,240  
  Costs   13,500   Fixed assets   30,150   Equity   25,790  
                       
  Taxable income $ 6,300       Total $ 42,030       Total $ 42,030  
                       
  Taxes (24%)   1,512                  
                       
    Net income $ 4,788                  
                       
 

 

Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 35 percent dividend payout ratio. 

 

What is the sustainable growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

The most recent financial statements for Bello Co. are shown here:
Income Statement
Balance Sheet
Current
Sales
$19,800
$ 11,880 Debt
$ 16,240
assets
Costs
13,500
Fixed assets 30,150 Equity
25,790
Таxable
$ 6,300
Total
$42,030
Total
$42,030
income
Тахes (24%)
1,512
Net income
$ 4,788
Assets and costs are proportional to sales. Debt and equity are not. The company
maintains a constant 35 percent dividend payout ratio.
What is the sustainable growth rate? (Do not round intermediate calculations and enter
your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Sustainable growth rate
%
Transcribed Image Text:The most recent financial statements for Bello Co. are shown here: Income Statement Balance Sheet Current Sales $19,800 $ 11,880 Debt $ 16,240 assets Costs 13,500 Fixed assets 30,150 Equity 25,790 Таxable $ 6,300 Total $42,030 Total $42,030 income Тахes (24%) 1,512 Net income $ 4,788 Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 35 percent dividend payout ratio. What is the sustainable growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Sustainable growth rate %
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

Blurred answer
Similar questions
Recommended textbooks for you
Essentials Of Investments
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
FUNDAMENTALS OF CORPORATE FINANCE
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:
9781260013962
Author:
BREALEY
Publisher:
RENT MCG
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Foundations Of Finance
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education