Sourstone, Inc., had equity of $140,000 at the beginning of the year. At the end of the
Question:
Sourstone, Inc., had equity of $140,000 at the beginning of the year. At the end of the year, the company had total assets of $295,000. During the year, the company sold no new equity. Net income for the year was $30,000 and dividends were $3,600.
a.What is the sustainable growth rate for the company?(Do not round intermediate calculations and enter your answer as a percent rounded to
2 decimal places, e.g., 32.16.)
b.What is the sustainable growth rate if you use the formula ROE band beginning of period equity?(Do not round intermediate calculationsand enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
c.What is the sustainable growth rate if you use end of period equity in this formula?(Do not round intermediate calculationsand enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Expert Answer:
