Question: Cambria Inc had equity of 145 000 at the beginning of

Cambria, Inc., had equity of $145,000 at the beginning of the year. At the end of the year, the company had total assets of $275,000. During the year, the company sold no new equity. Net income for the year was $26,000 and dividends were $5,500. What is the sustainable growth rate for the company? What is the sustainable growth rate if you use the formula ROE 3 b and beginning of period equity? What is the sustainable growth rate if you use end of period equity in this formula? Is this number too high or too low? Why?


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  • CreatedMarch 13, 2014
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