General Accounting Question Solution please Your firm has an ROE of 11.2%, a payout ratio of 24%, $586, 300 ofstockholders' equity, and $356,000 of debt. If you grow at yoursustainable growth rate this year, how much additional debt will youneed to issue?The sustainable growth rate is %. (Round to three decimal place.)The ending total assets at the sustainable growth rate will be $(Round to the nearest dollar.)Because the firm grew at its sustainable growth rate, its debt/equityratio remains constant at 0.607198 and the debt-to-assets ratio will be0.377799. Thus, the new debt in the capital structure will be 0.377799times $1,022, 509 = $386, 303. Since the firm started at $356,000, it willissue about $30,303 in additional debt. Is the above statement true orfalse?

Step 1: Calculate the Sustainable Growth Rate (SGR)SGR = ROE x (1 - Payout Ratio)SGR = 11.2% x (1 -…

Answered: Your firm has an ROE of 11.2%, a payout…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Your firm has an ROE of 12.1%, a payout ratio of 21%, $632,800 of stockholders' equity, and $425,900 of debt. If you grow at your sustainable growth rate this year, how much additional debt will you need to issue? The sustainable growth rate is %. (Round to three decimal place.)
XYZ Corp. is anticipating a sustained growth rate of 15% per year. Is it possible for them to achieve this growth rate given the following numbers. Debtequity ratio of 0.40 times Profit margin is 5.3 percent Capital Intensity Ratio is 0,75 times to answer: determine what the dividend payout ratio must be. How do you interpret the result?
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Your firm has an ROE of 12.1%, a payout ratio of 27%, $594,200 of stockholders' equity, and $386,100 of debt. If you grow at your sustainable growth rate this year, how much additional debt will you need to issue?
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A firm’s current profits are P550,000. These profits are expected to grow indefinitely at a constant annual rate of 5 percent. If the firm’s opportunity cost of funds is 8 percent, determine the value of the firm: a. The instant before it pays out current profits as dividends: b. The instant after it pays out current profits as dividends.
You have located the following information on Webb’s Heating & Air Conditioning: debt ratio is 63 percent, capital intensity is 1.20 times, profit margin is 11.6 percent, and the dividend payout is 16.00 percent. Calculate the sustainable growth rate for Webb. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Sustainable growth rate = ____.__ %
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