Question: help on both please As a firm grows, it must support increases in revenue with new investments in assets. The self-supporting, or sustainable, growth model
As a firm grows, it must support increases in revenue with new investments in assets. The self-supporting, or sustainable, growth model helps a firm assess how rapidly it can grow, while maintaining a balance between its cash outflows (increases in noncash assets) and inflows (funds resulting from increases in liabilities or equity). Consider the following case of Fuzzy Button Clothing Company: Fuzzy Button Clothing Company has no debt in its capital structure and has $300,000,000 in assets. Its sales revenues last year were $150,000,000 with a net income of $5,000,000. The company distributed $105,000 as dividends to its shareholders last year. Given the information above, what is Fuzzy Button Clothing Company's sustainable growth rate? 0.7314494% 1.66% 0.0349772% 2.7318006% Which of the following are assumptions of the sustainable (self-supporting) growth model? Check all that apply. The firm maintains a constant net profit margin. The firm must issue the same number of new common shares that it issued last year. The firm maintains a constant ratio of assets to equity. The firm uses all equity and no debt financing
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