Using the information in the following table, calculate this company's: $49 300 Net Income Beginning Total Assets Beginning Stockholders' Equity Payout Ratio $399,700 $249.800 0% a. Internal growth rate. b. Sustainable growth rate. c. Sustainable growth rate if it pays out 45% of its net income as a dividend. The Tax Cuts and Jobs Act of 2017 temporarily allows 100% bonus depreciation (effectively expensing capital expenditures). However, we will still include depreciation forecasting in this chapter and in these problems in anticipation of the return of standard depreciation practices during your career.
Using the information in the following table, calculate this company's: $49 300 Net Income Beginning Total Assets Beginning Stockholders' Equity Payout Ratio $399,700 $249.800 0% a. Internal growth rate. b. Sustainable growth rate. c. Sustainable growth rate if it pays out 45% of its net income as a dividend. The Tax Cuts and Jobs Act of 2017 temporarily allows 100% bonus depreciation (effectively expensing capital expenditures). However, we will still include depreciation forecasting in this chapter and in these problems in anticipation of the return of standard depreciation practices during your career.
Chapter9: Projecting Financial Statements
Section: Chapter Questions
Problem 5EP
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Transcribed Image Text:a. Internal growth rate.
The internal growth rate is%. (Round to one decimal place.)
b. Sustainable growth rate.
The sustainable growth rate is %. (Round to one decimal place.)
c. Sustainable growth rate if it pays out 45% of its net income as a dividend.
The sustainable growth rate, if it pays out 45% of its net income as a dividend, is
%. (Round to one decimal place.)
Transcribed Image Text:Using the information in the following table, calculate this company's:
Net Income
$49,300
Beginning Total Assets
Beginning Stockholders' Equity
Payout Ratio
$399,700
$249,800
0%
a. Internal growth rate.
b. Sustainable growth rate.
c. Sustainable growth rate if it pays out 45% of its net income as a dividend.
The Tax Cuts and Jobs Act of 2017 temporarily allows 100% bonus depreciation (effectively expensing capital expenditures). However, we will still include depreciation forecasting in this chapter and in these problems in anticipation of the return of standard depreciation practices during your career.
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