Langley County Inc. had equity of $145,000 at the beginning of the year. At the end of
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Langley County 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 × R 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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Since the company issued no new equity shareholders equity increased by retained earnings Additional ...View the full answer
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Related Book For 
Fundamentals Of Corporate Finance
ISBN: 9781259654756
10th Canadian Edition
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan, Gordon Roberts, J. Ari Pandes, Thomas Holloway
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