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

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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?


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