Ratios are constant-what is the sustainable growth rate

Assignment Help Financial Management
Reference no: EM131306557

Assume the following ratios are constant: Total asset turnover 2.50 Profit margin 6.5 % Equity multiplier 1.60 Payout ratio 20 % What is the sustainable growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Reference no: EM131306557

Questions Cloud

Estate tax liability the client will ultimately pay : the 30-year projections in layman’s terms, assuming 3% annual appreciation in the value of the assets of a business. Consider the gift and estate tax liability the client will ultimately pay.
How would your decision affect the overall project : What do you need to consider before accepting or denying the vendor proposal? Explain. How would your decision affect the overall project?
Provide larger monthly payment to male annuitant : Which will provide a larger monthly payment to a male annuitant age 65, an annuity, five years certain, or an installment-refund annuity? Assume the same amount of money is available for each purchase.
Which of these is closest to the winning price : Suppose that five bidders with values of $500, $400, $300, $200, and $100 attend an oral auction. Which of these is closest to the winning price?
Ratios are constant-what is the sustainable growth rate : Assume the following ratios are constant: Total asset turnover 2.50 Profit margin 6.5 % Equity multiplier 1.60 Payout ratio 20 % What is the sustainable growth rate?
What are some of the unique challenges of resorts : What are some of the unique challenges of resorts and emerging markets? Cite five examples from the Blackboard videos (video will be attached).
What is current share price-company will maintain dividend : Estes Park Corp. pays a constant $8.60 dividend on its stock. The company will maintain this dividend for the next 11 years and will then cease paying dividends forever. If the required return on this stock is 11 percent, what is the current share pr..
Describe the major schools of management thought : Describe the Major Schools of Management Thought - Critically analyze the Classical approaches to management and discuss the ideas introduced by the human resource approaches
The structure of wal-mart : Research new service models such as Web hosting, storage area networks, application services provided by external sources, on-demand computing, utility computing, and grid computing. Also, research and learn how companies use incremental outsourcing ..

Reviews

Write a Review

Financial Management Questions & Answers

  Rapid growth-what is projected dividend for coming year

Momsen Corp. is experiencing rapid growth. Dividends are expected to grow at 28 percent per year during the next three years, 18 percent over the following year, and then 5 percent per year indefinitely. The required return on this stock is 11 percen..

  How much will you pay for the company’s stock today

Caan Corporation will pay a $2.94 per share dividend next year. The company pledges to increase its dividend by 4.5 percent per year indefinitely. If you require a return of 12 percent on your investment, how much will you pay for the company’s stock..

  What is the expected return on the portfolio

You own a portfolio that has $2,500 invested in Stock A and $3,500 invested in Stock B. If the expected returns on these stocks are 10 percent and 16 percent, respectively, what is the expected return on the portfolio?

  Firm uses debentures rather than first mortgage bonds

When the firm uses debentures rather than first mortgage bonds, What effect does this have on the interest rate that a firm must pay on a new issue of long-term debt. Why does it have such an effect?

  What is estimated value per share of your firms stock

Assume that the average firm in your company’s industry is expected to grow at a constant rate of 6% and that its dividend yield is 7%. Your company is about as risky as the average firm in the industry, what is the estimated value per share of your ..

  Dollar growth-how was the growth financed

Middleton Clinic had total assets of $500,000 and an equity balance of $350,000 at the end of 2010. One year later, at the end of 2011, the clinic had $575,000 in assets and $380,000 in equity. What was the clinic’s dollar growth in assets during 201..

  The average serial coreeltaion

The average serial coreeltaion, which indicates if there is a relationship between yesterday's return and today's return for the 100 largest companies is a. positive, and large, b. not possible to calculate, c. zero, d. positive, but small, e. negati..

  What is the internal rate of return for this investment

An apartment building in your neighborhood is for sale for $140,000. The building has four units, which are rented at $500 per month each. The tenants have long-term leases that expire in 5 years. Maintenance other expenses for care and upkeep are $8..

  What is the maximum initial cost the company

Scanlin, Inc., is considering a project that will result in initial aftertax cash savings of $1.84 million at the end of the first year, and these savings will grow at a rate of 1 percent per year indefinitely. What is the maximum initial cost the co..

  Disadvantages of models used to assess risk exposure

Discuss the advantages and disadvantages of models used to assess risk exposure. Which of the disadvantages might be the most problematic?

  Calculate the present value of total inflows

The Bowman Corporation has a bond obligation of $16 million outstanding, which it is considering refunding. Though the bonds were initially issued at 13 percent, the interest rates on similar issues have declined to 11.8 percent. Calculate the presen..

  How large would barnetts uninsured deposits be

How large would Barnett's uninsured deposits be in these FDIC insured banks if the funds were held at the same point in time.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd