As a firm grows, it must support increases in revenue with new investments in assets. The self-supporting growth model helps a firm assess how rapidly it can grow, while maintaining a balance between its cash outflows (increases in noncash assets) and inflows (funds resulting from increases in liabilities or equity).   Consider this case: Green Caterpillar Garden Supplies Inc. has no debt in its capital structure and has $150 million in assets. Its sales revenues last year were $75 million with a net income of $5 million. The company distributed $1.60 million as dividends to its shareholders last year.   What is the firm’s self-supporting, growth rate? (Note: Do not round your intermediate calculations.) 1.08%   2.32%   4.60%   1.00%     Which of the following are assumptions of the self-supporting growth model? Check all that apply.   The firm’s total asset turnover ratio remains constant.   The firm pays no dividends.   The firm’s liabilities and equity must increase at the same rate.   The firm will not issue any new common stock next year.

An all-equity firm will spend $1,500,000 to expand the business. It has $100,000 in cash, can borrow up to $900,000, and can issue up to $1,000,000 in new equity. If the firm applies the pecking order theory of capital structure, what percentage of the expansion will be financed with debt?

ClapTrap is a rapidly growing image messaging company. The company's growth strategy requires rapid reinvestment currently, with dividend payouts increasing as growth opportunities gradually disappear. You have the following financial information about ClapTrap: Earnings in the most recently concluded fiscal year were $$6.286.28. The company will retain all its earnings this year (from t=00 to t=11 ), reinvesting in new projects with a return on new investment of 44.044.0%. The next year (from t=11 to t=22 ), the company will retain 85.085.0% of its earnings. Return on new investment is expected to be 30.030.0%. In the following year (from t=22 to t=33 ), the company will retain 69.069.0% of its earnings with an expected return on new investment of 20.020.0%. The company will then enter a period of stable growth, retaining 49.049.0% of its earnings in perpetuity. a)  What are the expected dividends per share for each period from t=11 to t=33 ?  The expected dividends per share for…

The Hasting Sugar Corporation has the following pattern of net income each year, and associated capital expenditure projects. The firm can earn a higher return on the projects than the stockholders could earn if the funds were paid out in the form of dividends. The Hasting Sugar Corporation has the following pattern of net income each year, and associated capital expenditure projects. The firm can earn a higher return on the projects than the stockholders could earn if the funds were paid out in the form of dividends.Year 1: net income $18million, Profitable Capital Expenditure $7 million Year 2 : net income 16 million profitable capital expenditure 12 million Year 3: net income 11 million profitable capital expenditure 6 million Year 4: net income 22 million profitable capital expenditure 7 million Year 5: net income 20 million profitable capital expenditure 8 million The Hastings corporation has 12 million shares outstanding.   a. If the marginal principle of retain earnings is…