Question: Question 5. (15 marks) You are prepanng for a strategy meeting and management expect you to provide a sustainable growth rate to be used the
Question 5. (15 marks) You are prepanng for a strategy meeting and management expect you to provide a sustainable growth rate to be used the assumptions are that the profitability and financial policies will not change You gather the following actual information for the year ended February 2018 R'000 Ordinary share capital 4,526,000 Retained earnings at the beginning of the year 675,000 Retained earnings at the end of the year 896,000 Dividends declared and paid 165,000 Total assets 9,765,000 Required. a) Calculate the sustainable growth rate based on the assumption that profitability and financial policies will be unchanged Support your answer with detailed calculations (10) b) If the sustainable growth rate is not accepted by the strategy committee, name and briefly explain possible options to increase the sustainable growth rate
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