he financial statements of Eagle Sport Supply are shown in the table below. For simplicity. "Costs" include interest. Assume that agle's assets are proportional to its sales. Assume a growth rate of 35% in revenue, expenses, and assets in 2023. The tax rate will emain constant. Sales Income Statement Costs $ 4,350 1,950 Pretax income Taxes (at 30.0%) $ 2,400 720 Net income $ 1,680 2022 Balance Sheet, Year-End 2021 2022 Net assets $ 6,400 $ 6,100 Total $ 6,400 $ 6,100 Debt Equity Total $ 2,700 3,700 $ 6,400 2021 $ 2,600 3,500 $6,100 a. Assume that the dividend payout ratio is fixed at 50% and the equity-to-asset ratio is fixed at two-thirds. What is the internal growth rate for 2023? b. What is the sustainable growth rate for 2023? Note: For all requirements, do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.
he financial statements of Eagle Sport Supply are shown in the table below. For simplicity. "Costs" include interest. Assume that agle's assets are proportional to its sales. Assume a growth rate of 35% in revenue, expenses, and assets in 2023. The tax rate will emain constant. Sales Income Statement Costs $ 4,350 1,950 Pretax income Taxes (at 30.0%) $ 2,400 720 Net income $ 1,680 2022 Balance Sheet, Year-End 2021 2022 Net assets $ 6,400 $ 6,100 Total $ 6,400 $ 6,100 Debt Equity Total $ 2,700 3,700 $ 6,400 2021 $ 2,600 3,500 $6,100 a. Assume that the dividend payout ratio is fixed at 50% and the equity-to-asset ratio is fixed at two-thirds. What is the internal growth rate for 2023? b. What is the sustainable growth rate for 2023? Note: For all requirements, do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter6: Accounting For Financial Management
Section: Chapter Questions
Problem 11P: The Berndt Corporation expects to have sales of 12 million. Costs other than depreciation are...
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