Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Gilmore, Inc., had equity of $175,000 at the beginning of the year. At the end of the year,
the company had total assets of $330,000. During the year, the company sold no new
equity. Net income for the year was $37,000 and dividends were $5,000.
a. Calculate the internal growth rate for the company. (Do not round intermediate
calculations and enter your answer as a percent rounded to 2 decimal places, e.g.,
32.16.)
b. Calculate the internal growth rate using ROA × b for beginning of period total assets.
(Do not round intermediate calculations and enter your answer as a percent
rounded to 2 decimal places, e.g., 32.16.)
c. Calculate the internal growth rate using ROA × b for end of period total assets. (Do
not round intermediate calculations and enter your answer as a percent rounded
to 2 decimal places, e.g., 32.16.)
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Transcribed Image Text:Gilmore, Inc., had equity of $175,000 at the beginning of the year. At the end of the year, the company had total assets of $330,000. During the year, the company sold no new equity. Net income for the year was $37,000 and dividends were $5,000. a. Calculate the internal growth rate for the company. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. Calculate the internal growth rate using ROA × b for beginning of period total assets. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. Calculate the internal growth rate using ROA × b for end of period total assets. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
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