A venture started the year with $20 million in book value of equity. It plans no intermediate equity injections or withdrawals and projects net income of $2 million for the year. It will pay a $500,000 (25%) dividend at the beginning of the next period and retain $1,500,000 (75%). Assuming that the company will scale up with the same margins, what is the sustainable sales growth rate?

Answer rating: 100% (QA)

To calculate the sustainable sales growth rate we need to consider the retained earnings and th... View the full answer