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Scott Kelly is reviewing MasterToy's financial statements in order to

Scott Kelly is reviewing MasterToy's financial statements in order to estimate its sustainable growth rate. Consider the

Question:

Scott Kelly is reviewing MasterToy's financial statements in order to estimate its sustainable growth rate. Consider the information presented in the following exhibit.

a. Identify and calculate the components of the DuPont formula.
b. Calculate the ROE for 2014 using the components of the DuPont formula.
c. Calculate the sustainable growth rate for 2014 from the firm's ROE and plowback ratios.

Transcribed Image Text:

MasterToy Inc.: Actual 2013 and estimated 2014 financial statements for fiscal year ending December 31 (S million, except per-share data) 2 change (96) 7.6% 0 8.4 8.6 Average shares outstanding (milllons) Net property, plant, and equipment Total llabillties and equity r share

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a b c g ROE Plowback ROE Net profits Sales Assets ...View the full answer

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My self Mugdha Sisodiya from Chhattisgarh India. I have completed my Bachelors degree in 2015 and My Master in Commerce degree in 2016. I am having expertise in Management, Cost and Finance Accounts. Further I have completed my Chartered Accountant and working as a Professional. Since 2012 I am providing home tutions.

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