Question: + Internal Equity Debt Equity External Equity Leverage 2. Assume that the g, (internal) and g, (sustainable) growth rates are 4% and 9%, respectively.
+ Internal Equity Debt Equity External Equity Leverage 2. Assume that the g, (internal) and g, (sustainable) growth rates are 4% and 9%, respectively. First show in the table below the funding for growth rates of 4% and 9 %. Consider CRE (contribution to retained earnings)(NI - Div) (internal equity), bond issues (external debt) and equity issues (external equity) as the types of funding. Next, what types of funding are used for the following three growth rates (2%, 6%, 12%)? Which of these situations are considered to be: capital consumption; a cash cow? Comment on the leverage for growth rates of 2%, 6% and 12%. 2% 4% 6% 9% 12%
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