Question: Most recent Growth Rate, Return on Assets, Return on Equity, and Dividend Payout Ratio are given (in order) for AECOM and QUALCOMM. AECOM: 22.7%, 4.4%,
Most recent Growth Rate, Return on Assets, Return on Equity, and Dividend Payout Ratio are given (in order) for AECOM and QUALCOMM. AECOM: 22.7%, 4.4%, 12.53%, 1/3 QUALCOMM: 36.2%, 9.89%, 19.05%, 1/3 If each company relies on Internal Growth Rate next year, that is, relies only on retained earnings without any other financing, what would the new growth rate be for each company? If instead, each decides to keep their Debt/Equity ratio as before, what would their growth rate be? Comparing the most recent growth rates that are given for these two companies to the growth rates that you calculated, what can you say about the trend of funding needs (verbal, not numerical)?
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