The most recent financial statements for Mandy Company are shown here: Income Statement Balance Sheet Sales $ 20,800 Current assets $ 12,080 Debt $ 16,840 Costs 14,320 Fixed assets 34,650 Equity 29,890 Taxable income $ 6,480 Total $ 46,730 Total $ 46,730 Taxes (25%) 1,620 Net income $ 4,860 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 Mandy Company are shown here: Income Statement Balance Sheet Sales $ 20,800 Current assets $ 12,080 Debt $ 16,840 Costs 14,320 Fixed assets 34,650 Equity 29,890 Taxable income $ 6,480 Total $ 46,730 Total $ 46,730 Taxes (25%) 1,620 Net income $ 4,860 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
Related questions
Question
|
The most recent financial statements for Mandy Company are shown here: |
| Income Statement | Balance Sheet | ||||
|---|---|---|---|---|---|
| Sales | $ 20,800 | Current assets | $ 12,080 | Debt | $ 16,840 |
| Costs | 14,320 | Fixed assets | 34,650 | Equity | 29,890 |
| Taxable income | $ 6,480 | Total | $ 46,730 | Total | $ 46,730 |
| Taxes (25%) | 1,620 | ||||
| Net income | $ 4,860 | ||||
|
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.) |
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
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…
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