You are given the following information on Kayla's Heavy Equipment: Profit margin 5.8% Capital intensity ratio .67 7 Debt-equity ratio Net income Dividends $ 64,000 $ 14,600 Calculate 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
You are given the following information on Kayla's Heavy Equipment: Profit margin 5.8% Capital intensity ratio .67 7 Debt-equity ratio Net income Dividends $ 64,000 $ 14,600 Calculate 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
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
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A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.
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The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
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Transcribed Image Text:You are given the following information on Kayla's Heavy Equipment:
Profit margin
Capital intensity ratio
Debt-equity ratio
Net income
Dividends
5.8%
.67
Sustainable growth rate
7
$ 64,000
$ 14,600
Calculate 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.)
%
Transcribed Image Text:Assume the following ratios are constant:
Total asset
turnover
Profit margin
Equity multiplier
Payout ratio
27
6.7%
20
22%
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
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