a. What is the sustainable growth rate for the company? (Do not round interme calculations and enter your answer as a percent rounded to 2 decimal plac 32.16.) b. If it does grow at this rate, how much new borrowing will take place in the con year, assuming a constant debt-equity ratio? (Do not round intermediate calce and round your answer to 2 decimal places, e.g., 32.16.) c. What growth rate could be supported with no outside financing at all? (Do na intermediate calculations and enter your answer as a percent rounde decimal places, e.g., 32.16.)
a. What is the sustainable growth rate for the company? (Do not round interme calculations and enter your answer as a percent rounded to 2 decimal plac 32.16.) b. If it does grow at this rate, how much new borrowing will take place in the con year, assuming a constant debt-equity ratio? (Do not round intermediate calce and round your answer to 2 decimal places, e.g., 32.16.) c. What growth rate could be supported with no outside financing at all? (Do na intermediate calculations and enter your answer as a percent rounde decimal places, e.g., 32.16.)
Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)
8th Edition
ISBN:9781285065137
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Eugene F. Brigham, Joel F. Houston
Chapter8: Risk And Rates Of Return
Section: Chapter Questions
Problem 6DQ
Related questions
Question
![You've collected the following information about Caccamisse, Incorporated:
$ 255,000
$19,200
$7,500
$ 67,000
$77,000
Sales
Net income
Dividends
Total debt
Total equity
a. What is the sustainable growth rate for the company? (Do not round interme
calculations and enter your answer as a percent rounded to 2 decimal plac
32.16.)
b. If it does grow at this rate, how much new borrowing will take place in the com
year, assuming a constant debt-equity ratio? (Do not round intermediate calca
and round your answer to 2 decimal places, e.g., 32.16.)
c. What growth rate could be supported with no outside financing at all? (Do no
intermediate calculations and enter your answer as a percent rounde-
decimal places, e.g., 32.16.)
a. Sustainable growth rate
b. Additional borrowing
c. Internal growth rate
%
%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2f2d8308-4617-4f9f-b9aa-7267aedefe16%2F3f17ffeb-86bd-4e2a-91fb-f499c4e072eb%2Fxc5d9jg_processed.jpeg&w=3840&q=75)
Transcribed Image Text:You've collected the following information about Caccamisse, Incorporated:
$ 255,000
$19,200
$7,500
$ 67,000
$77,000
Sales
Net income
Dividends
Total debt
Total equity
a. What is the sustainable growth rate for the company? (Do not round interme
calculations and enter your answer as a percent rounded to 2 decimal plac
32.16.)
b. If it does grow at this rate, how much new borrowing will take place in the com
year, assuming a constant debt-equity ratio? (Do not round intermediate calca
and round your answer to 2 decimal places, e.g., 32.16.)
c. What growth rate could be supported with no outside financing at all? (Do no
intermediate calculations and enter your answer as a percent rounde-
decimal places, e.g., 32.16.)
a. Sustainable growth rate
b. Additional borrowing
c. Internal growth rate
%
%
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