What is sustainable growth rate for bad company, inc.
Course:- Finance Basics
Reference No.:- EM13298416

Assignment Help >> Finance Basics

I'm having problems with the second question in the problem. You've collected the following information about Bad Company, Inc. :

Sales = $ 170,000
Net Income = 16,000
Dividends = 11,500
Total Debt = 120,000
Total equity = 44,000

What is sustainable growth rate for Bad Company, Inc.? If it does grow at this rate, how much new borrowing will take place in the coming year, assuming a constant debt-equity ratio?


Put your comment

Ask Question & Get Answers from Experts
Browse some more (Finance Basics) Materials
Distinguish between the different types of costs that were examined this week, such as sunk costs, opportunity costs, and outlay costs. [please also mention other costs that
Assume that you are a member of a large accounting firm which is responsible for preparing financial reports, including statements and notes to the accounts; and for advisin
An annual rate of interest on the borrowings of 6% Commission of 0.5% of the stocks value for buying and selling Be sure to factor in any dividends that are paid on the stoc
Pacific Traders has annual sales of $1,724,684. The firm's financial manager has determined that using a lockbox will reduce collection time by 3.9 days. If the firm's opportu
Please limit your response to this assignment to three single spaced, typed pages. Please cite your sources in the text and please reference them at the end of your assignment
What is an event study designed to test? What role does par value play in the pricing and sale of common stock by the issuing corporation? Why do most firms assign relativel
A McDonald's Big Mac costs 2.44 yuan in China, but costs $4.20 in the United States. Assuming that purchasing-power parity (PPP) holds, how many Chinese yuan are required to p
Critically evaluate the Free Cash Flow to Firm (FCFF) and the Free Cash Flow to Equity (FCFE) methods in the valuation of a financial institution. Critically assess if the c