Eagle Sports Supply has the following financial statements. Assume that Eagle’s assets are proportional to its sales. INCOME STATEMENT, 2019 Sales $ 900 Costs 170 Interest 50 Taxes 120 Net income $ 560 BALANCE SHEET, YEAR-END 2018 2019 2018 2019 Assets $ 3,150 $ 3,450 Debt $ 1,050 $ 1,150 Equity 2,100 2,300 Total $ 3,150 $ 3,450 Total $ 3,150 $ 3,450 What is the internal growth rate of Eagle Sports if the dividend payout ratio is fixed at 60% and the equity-to-asset ratio is fixed at 2/3? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. What is the sustainable growth rate? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.
Eagle Sports Supply has the following financial statements. Assume that Eagle’s assets are proportional to its sales. INCOME STATEMENT, 2019 Sales $ 900 Costs 170 Interest 50 Taxes 120 Net income $ 560 BALANCE SHEET, YEAR-END 2018 2019 2018 2019 Assets $ 3,150 $ 3,450 Debt $ 1,050 $ 1,150 Equity 2,100 2,300 Total $ 3,150 $ 3,450 Total $ 3,150 $ 3,450 What is the internal growth rate of Eagle Sports if the dividend payout ratio is fixed at 60% and the equity-to-asset ratio is fixed at 2/3? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. What is the sustainable growth rate? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Eagle Sports Supply has the following financial statements. Assume that Eagle’s assets are proportional to its sales.
| INCOME STATEMENT, 2019 | |
| Sales | $ 900 |
|---|---|
| Costs | 170 |
| Interest | 50 |
| Taxes | 120 |
| Net income | $ 560 |
| BALANCE SHEET, YEAR-END | |||||
| 2018 | 2019 | 2018 | 2019 | ||
|---|---|---|---|---|---|
| Assets | $ 3,150 | $ 3,450 | Debt | $ 1,050 | $ 1,150 |
| Equity | 2,100 | 2,300 | |||
| Total | $ 3,150 | $ 3,450 | Total | $ 3,150 | $ 3,450 |
-
What is the internal growth rate of Eagle Sports if the dividend payout ratio is fixed at 60% and the equity-to-asset ratio is fixed at 2/3?
Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.
-
What is the sustainable growth rate?
Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.
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