Total asset turnover Profit margin Equity multiplier Payout ratio 2.5 5.2% 1.3 22% "hat is the sustainable growth rate? ote: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal plac Answer is complete but not entirely correct.

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 14MC: This calculation determines profitability or growth potential of an investment, expressed as a...
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Assume the following ratios are constant:
Profit margin
Total asset turnover
2.5
5.2%
Equity multiplier
1.3
Payout ratio
22%
What is the sustainable growth rate?
Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g.,
Answer is complete but not entirely correct.
Sustainable growth rate
1.09
%
Transcribed Image Text:Assume the following ratios are constant: Profit margin Total asset turnover 2.5 5.2% Equity multiplier 1.3 Payout ratio 22% What is the sustainable growth rate? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., Answer is complete but not entirely correct. Sustainable growth rate 1.09 %
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