Assume the following ratios are constant:Profit marginTotal asset turnover2.55.2%Equity multiplier1.3Payout ratio22%What is the sustainable growth rate?Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g.,Answer is complete but not entirely correct.Sustainable growth rate1.09%

Answered: Image /qna-images/answer/96b453f3-fcfb-4d34-8158-061e2498ae18.jpg

Total asset turnover Profit margin Equity multiplier Payout ratio 2.5 5.2% 1.3 22% "hat is the sustainable growth rate? ote: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal plac Answer is complete but not entirely correct.

Total asset turnover Profit margin Equity multiplier Payout ratio 2.5 5.2% 1.3 22% "hat is the sustainable growth rate? ote: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal plac Answer is complete but not entirely correct.

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

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Question

Assume the following ratios are constant:
Profit margin
Total asset turnover
2.5
5.2%
Equity multiplier
1.3
Payout ratio
22%
What is the sustainable growth rate?
Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g.,
Answer is complete but not entirely correct.
Sustainable growth rate
1.09
%

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