You’ve collected the following information about Odyssey, Inc.: Sales =$165,000 Net income = $14,800 Dividends = $9,300 Total debt = $68,000 Total equity = $51,000 What is the sustainable growth rate for the company? If it does grow at this rate, how much new borrowing will take place in the coming year, assuming a constant debt –equity ratio? What growth rate could be supported with no outside financing at all?

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
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You’ve collected the following information about Odyssey, Inc.:
Sales =$165,000
Net income = $14,800
Dividends = $9,300
Total debt = $68,000
Total equity = $51,000
What is the sustainable growth rate for the company? If it does grow at this rate, how much new borrowing will take place in the coming year, assuming a constant debt –equity ratio? What growth rate could be supported with no outside financing at all?

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