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
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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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: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.) %
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
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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