Question: Please use the following data for Questions 6 & 7. A company has an ROA of 6% and an equity multiplier (Total Assets / Equity)

Please use the following data for Questions 6 & 7. A

Please use the following data for Questions 6 & 7. A company has an ROA of 6% and an equity multiplier (Total Assets / Equity) of 20. Net Income for last year was $5.0 Million of which $2.0 Million was paid out as dividends. Using the above data and the formulas: Internal Growth Rate = (ROA x Plowback)/(1-CROA x Plowback)) Sustainable Growth Rate = (ROE x Plowback)/(1-(ROE x Plowback) please answer the following two questions 6. What is the internal Growth Rate? 03.73% 04.12% 05.55% 06.00% None of the above are correct solutions. 7. What is the Sustainable Growth Rate? 04.9296 05.58% 07.76 08.24 None of the above are correct solutions

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