Your firm has an ROE of 12.1%, a payout ratio of 21%, $632,800 of stockholders' equity, and $425,900 ofdebt. If you grow at your sustainable growth rate this year, how much additional debt will you needto issue?The sustainable growth rate is %. (Round to three decimal place.)

Sustainable growth rate is the growth rate at which a company can grow if its current capital…

Answered: Your firm has an ROE of 12.1%, a payout…

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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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.)