Youve collected the following information about Molino, Inc.: Sales = $215,000 Net income = $17,300 Dividends =
Question:
You’ve collected the following information about Molino, Inc.:
Sales = $215,000
Net income = $17,300
Dividends = $9,400
Total debt = $77,000
Total equity = $59,000
What is the sustainable growth rate for the company? If it does grow at this rate, how much new borrowing will take place in the coming year, assuming a constant debt-equity ratio? What growth rate could be supported with no outside financing at all?
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Step by Step Answer:
To calculate the sustainable growth rate we first must calculate the retention ratio and ROE The ret...View the full answer
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Related Book For 
Fundamentals of Corporate Finance
ISBN: 978-1260153590
12th edition
Authors: Stephen M. Ross, Randolph W Westerfield, Robert R. Dockson, Bradford D Jordan
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