Based on the following information, calculate the sustainable growth rate for Lesners Kickboxing: Profit margin = 8.2%
Question:
Based on the following information, calculate the sustainable growth rate for Lesner’s Kickboxing:
Profit margin = 8.2%
Capital intensity ratio = .75
Debt-equity ratio = .40
Net income = $43,000
Dividends = $12,000
What is the ROE here?
Step by Step Answer:
We first must calculate the ROE using the DuPont ratio to cal...View the full answer
Fundamentals of Corporate Finance
ISBN: 978-0071051606
8th Canadian Edition
Authors: Stephen A. Ross, Randolph W. Westerfield
Related Video
The Dupont analysis is an expanded return on equity formula, calculated by multiplying the net profit margin by the asset turnover by the equity multiplier. The DuPont analysis is also known as the DuPont identity or DuPont model.This Video will guide on how to calculate return on Equity and estimate profitability of shareholders using DuPont Analysis.
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