Langston Ltd is considering financing options for its expansion project and plans to use the internal...

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Langston Ltd is considering financing options for its expansion project and plans to use the internal growth rate and sustainable growth rate to support its decision. In 2021, Langston has a total asset of $1,050,000 while the company's sales revenue over the year was $1,130,000 and the net profit was $255,000. Manors aims to maintain the debt to asset ratio at a constant level of 25%. During 2021, the company has paid $165,750 as dividends to its shareholders. Required a. b. Calculate Langston's sustainable growth rate and internal growth rate? Compare Langston's SGR and IGR and provide suggestions on financing options to the company expansion plan? Langston Ltd is considering financing options for its expansion project and plans to use the internal growth rate and sustainable growth rate to support its decision. In 2021, Langston has a total asset of $1,050,000 while the company's sales revenue over the year was $1,130,000 and the net profit was $255,000. Manors aims to maintain the debt to asset ratio at a constant level of 25%. During 2021, the company has paid $165,750 as dividends to its shareholders. Required a. b. Calculate Langston's sustainable growth rate and internal growth rate? Compare Langston's SGR and IGR and provide suggestions on financing options to the company expansion plan?

Answer rating: 100% (QA)

a To calculate Langstons sustainable growth rate SGR and internal growth rate IGR we can use the fol... View the full answer