What is the internal growth rate of eagle sport

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The financial statements of Eagle Sport Supply are shown in the below table. For simplicity, “Costs” include interest. Assume that Eagle’s assets are proportional to its sales. Assume a growth rate of 35%. Income Statement Sales $ 4,750 Costs 2,150 Pretax income 2,600 Taxes (at 40%) 1,040 Net income $ 1,560 Balance Sheet, Year-end 2014 2013 2014 2013 Assets $ 6,800 $ 6,500 Debt $ 2,900 $ 2,800 Equity 3,900 3,700 Total $ 6,800 $ 6,500 Total $ 6,800 $ 6,500 a. Assume that the dividend payout ratio is fixed at 50% and the equity-to-asset ratio is fixed at two-thirds. What is the internal growth rate of Eagle Sport? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Reference no: EM131020184

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